Amazon’s Q2 Disappoints, Sales Up 22 Percent To $15.7B, Net Loss Of $7M

Amazon just reported second-quarter earnings, with sales increasing 22 percent to $15.7 billion in the second quarter, compared with $12.83 billion in second quarter 2012. Net loss was $7 million in the second quarter, or $0.02 per diluted share, compared with net income of $7 million, or $0.01 per diluted share, in second quarter 2012. Analysts expected $15.74 billion in revenue, and $0.05 on earnings per share.

Operating income decreased 26 percent to $79 million in the second quarter, compared with $107 million in second quarter 2012.

“We’re so grateful to our customers for their response to Kindle devices and our digital ecosystem. This past quarter, our top 10 selling items worldwide were all digital products – Kindles, Kindle Fire HDs, accessories and digital content,” said Amazon founder and CEO Jeff Bezos, in a statement.

“The Kindle service keeps getting better. The Kindle Store now offers millions of titles including more than 350,000 exclusives that you won’t find anywhere else. Prime Instant Video has surpassed 40,000 titles, including many premium exclusives like Downton Abbey and Under the Dome. And we’ve added more than a thousand books, games, educational apps, movies and TV shows to Kindle FreeTime Unlimited, bringing together in one place all the types of content kids and parents love.”

Bezos didn’t address why Amazon missed on expectations for the quarter, but perhaps this will be revealed in the call. According to analyst estimates, the ecommerce giant was expected to post net income of $28.3 million.

It’s been an eventful quarter for Amazon. Towards the end of the first quarter, Amazon purchased social reading service Goodreads, which now has 20 million members. Amazon also expanded its international footprint, including expansion to India. Additionally the company bought screen technology company Liquavista from Samsung.

Other news included the expansion of its grocery delivery service to L.A. and San Francisco, a new Facebook-focused gifting product, an online store for 3D printers, and of course there were those smartphone rumors.

UPDATING

Amazon Debuts A Cross-Platform App Analytics Service With A/B Testing Bundled In

Amazon is improving its suite of services for mobile app developers today, including those who build apps for Apple’s iOS platform in addition to Android and Amazon’s Android-based Fire OS, with the debut of a new mobile app SDK which now includes both an Analytics and A/B testing service. This is an expansion of services Amazon previously offered to mobile developers, which also allowed them to track and test their apps on Amazon’s Fire OS.

Amazon had offered analytics and reporting tools in the past, which were expanded this summer to include support for HTML5 web apps, too, which Amazon will now package on behalf of developers in order to sell in the Amazon Appstore marketplace.

But the company is today positioning analytics as a “new” service now that it’s been designed to work across platforms, including iOS, Android and Fire OS, and includes an optional A/B testing component within its SDK.

Like its competitors, Analytics lets developers track app performance and trends in order to take steps to improve engagement and monetization efforts. In Amazon’s case, it provides nine different metrics across the Analytics Dashboard, including things like Daily and Monthly Active Devices, New Devices, Session and Retention Data, “Sticky Factor,” and various ways to track the average revenue per device. The data can also be filtered by platform, and exported in CSV format.

Note that Amazon has decided to track engagement and retention by device, not by user, as developers may be more used to elsewhere. That means a single customer launching an app on two different devices is counted twice will be counted twice, while two customers launching an app on a single device will be counted once.

Having an analytics dashboard is something all major app stores offer, but many serious developers opt to use third-party tools to track their mobile app’s performance, user retention, revenue, ad performance, and more, using free or paid tools like those from Flurry, App Annie, Distimo or others – especially if they’re selling ads within their application, and need to better understand user demographics and behavior. So while it’s useful that Amazon now provides a free option of its own for cross-platform developers, it’s not likely to be a best of breed service anytime soon.

Meanwhile, the new Analytics SDK also now includes Amazon’s A/B testing service for apps, which was first announced nearly a year ago for Android developers. This service allows developers to upload apps with different variables in order to experiment with features and changes, and then iterate after they learn how those changes affect metrics that matter to them, like revenue, retention, time spent in the app, and more.

With the release of the Analytics SDK, the A/B testing service supports all Android (not just Fire OS) and iOS devices, including iPhone and iPad. Developers can run as many tests as they like, without being charged, as well as target various user segments and run reports. The A/B testing service supports up to five variations at once, not just two, as the “A/B” name may imply, and the changes can be tested and then made live for all users without having to resubmit the application to the app store.

Amazon has been regularly updating and expanding its services for mobile developers over the past year or so, with a variety of tools including push notifications, in-app purchasing, mobile ads, the Amazon Associates API, GameCircle, Login with Amazon, incentive programs, and more.

These improvements come at a time when the company is in reported to be in the process of developing its own smartphones, which would position itself as even more of a competitor to Google’s Android platform, Apple’s iOS, Windows Phone and others. Having a robust suite of developer-facing tools would be a competitive advantage in that case, though today it supports Amazon’s efforts on tablets and with its Google Play alternative, the Amazon Appstore.