www.Amazon.com's lowering of its sales and profits forecasts has
been described as a sign that e-business spending is reaching
"maturity" after exceptional growth.
Arlene MartinRichard Holway, a director of Ovum Holway, said, "People should
expect to see similar profit warnings and profit revisions in the
future. This reflects a slowdown in IT sector spending, which
started last year and which is going to continue."
Releasing its fourth-quarter of 2000 results yesterday, the
world's most famous e-tailer lowered its sales forecast for 2001 by
10%, from $4bn (£2.73bn) to between $3.3bn and $3.6bn. The company
expects to reach profitability by December 31 2001.
Holway added, "I believe that the growth rate of the IT industry
will now be expressed in single digits. The industry is in for a
lean time. It is a mature industry now, so there is no reason why
it should operate any differently from the rest of the economy. IT
cannot continue to grow at the rate it has done in the past since
to do so would be to defy gravity."
However, he maintained, "It is a good industry to be in."
Amazon reported losses in the October to December 2000 period of
$90.4m on sales of $972m. Last year's losses for the same quarter
were $184.9m. In a bid to reduce its operating costs and reach
profitability, Amazon announced that 1,300 US staff would lose
their jobs.
Internet firms AltaVista, DoubleClick and eBay have all
announced redundancies in recent months.