The report also says that you guys are inefficient and screw up the nuts and bolts of retailing. Is that accurate? We’re talking about huge numbers of transactions, growing 90 percent in a single three-month period and delivering to customers better by far than any of our competitors. To me, that sounds like a company that executes pretty well.
Why do you think the market reacted the way it did? We’ve all seen this movie before. Stocks that can be up 20 percent in a day can be down 20 percent in a day.
Let’s talk Harry Potter for a moment. You’ve got more than 282,000 Harry Potter books on preorder. You’re offering a 40 percent discount and a shipping upgrade to some customers. Are you taking a loss on each book, and isn’t that just the kind of transaction that Wall Street is frowning on? So we are taking a loss. Our pricing is completely sustainable–but it doesn’t have to be on an item-by-item basis. You never have to have the either-or mentality, that if you are doing something good for customers, it’s bad for shareholders.
How can you improve upon the last holiday season, when you bought too many toys and electronics and had to take write-offs as a result? In our new businesses, like toys and electronics, we did a fantastic job for customers at great expense to ourselves because there was a lot we needed to learn. And I think we’re going to do a better job of that this year.
Let’s just reflect on these five years. When you launched, you guys were the antichrist of publishing. Now there are these digital download and e-book players, and you are almost the establishment. That has to be a weird transformation. Well, we certainly don’t feel establishment [laugh]. But you do see the internal irony, the irony of being able to somehow be both the establishment and the company that’s going to be bankrupt in September.
What’s your current thinking on spam? How many marketing e-mails will users tolerate? I think the equilibrium finds [users]. If you are sending people relevant communications that they actually value, then you are providing a service. If you are annoying people, they will vote with their wallets.
