This is a partial transcript from Your World with Neil Cavuto, January 22, 2002. Click here for complete access to all of Neil Cavuto's CEO interviews.
NEIL CAVUTO, HOST: Well, Amazon.com stock up more than 20 percent today. The reason: it is making money, reporting an operating profit for the last quarter, something once thought unattainable, even unthinkable.
So how does company hotshot Jeff Bezos feel about all of this? Well, let's ask him. Jeff, good to have you back. Happy new year.
JEFFREY BEZOS, CEO, AMAZON.COM: Nice to be here. Thanks, Neil.
CAVUTO: Apparently you had a very strong holiday season, huh?
BEZOS: We had a great Q4. We're incredibly proud of it. And what really drove it was lower prices for customers. You know, we took some dramatic price action, books over $20, 30 percent off. We`ve always had low prices, but pushing that a little further really had a big impact on our results.
CAVUTO: It`s interesting too. You had been always arguing, I have to build up — and I have some paraphrasing here — in order to eventually be profitable so people who are criticizing you — do you find it ironic that now some business journalists are coming back at you and saying, ah, but now all of the sudden, that theory is flawed. You have to build up more mass. You are becoming profitable too soon.
BEZOS: Well, the way we got here today, it took six years. And what we did was we focused relentlessly on every element of the customer experience. And we just fundamentally believe that's what matters. Low prices is part of that. Selection is part of that. Making things easily available is part of that. And that`s what we`ve tried to do.
CAVUTO: Does it bug you that some look at you though as an Enron in the making? I don`t mean to besmirch you, but that the way you account for those sales, the way you sell some things as essentially at a loss, that you can`t keep that going. I think "Barron's", it calls it like a "Ponzi scheme". You can't keep that up.
BEZOS: Well, you know, we've always had lots of supporters and we've always had lots of critics. And the good news is even our critics have been our customers.
BEZOS: So we've always felt good about what we were doing and staying true to our own...
CAVUTO: But there is this large short position in your stock. Obviously, people just hope and praying for you to...
BEZOS: Sure. There's always been, you know, for whatever reason a very controversial stock, but not a controversial...
CAVUTO: But does that annoy you, that there's always this bloodrush to get you...
BEZOS: No, not at all. I think one of the things that we do is that we take a very long-term time horizon. We're always very clear about that and we always have been. But that does put us at odds with some people who would have us pursue us for return (ph) strategy.
We're doing it again. And this quarter, effective today, we are introducing a thing called super saver shipping, which is free on orders over $99. That's going to be very expensive for the economy. It's a big deal. It's obviously great for customers. But again, it's an investment in the short term and it will pay dividends in the long term.
CAVUTO: The DVDs, which are a strong part of your business, Harry Potter books, a strong part of your business. I should disclose to people I order a lot from you this past season. Apparently I was not alone.
But this view that convenience, ultimately you need even more of a menu. How do you people who have got enough of a menu as it is?
BEZOS: Well, I think that every time you can layer on something to your customer experience, so if you can add selection, you're helping your customers. If you can add convenience, you are helping your customers. If you can lower prices even further, you're helping your customers. And if you put all those things together, that's the menu that makes for a large, important company that ultimately has sustainable growing cash flow.
CAVUTO: Profitable this year?
BEZOS: We're going for operating cash flow this year. And then beyond that, it will be sustainable growing free cash flow.
CAVUTO: Jeff Bezos, always a pleasure.
BEZOS: Thank you.
CAVUTO: Thank you very much.
BEZOS: Thanks, Neil.
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