Amazon founder ready to open a new chapter as Net retailing comes of age

"I've recovered from my jet lag so if I say something stupid I haven't got that as an excuse. It usually doesn't take much. Ho, ho, ho, ho." Out comes this booming laugh, like Santa Claus in a particularly good mood.

The laugh comes from the small frame of Jeff Bezos, the founder and chief executive of Amazon.com, one of the best-known internet businesses on the planet.

Mr Bezos, 38, is in London to celebrate the fourth anniversary of Amazon's UK division, amazon.co.uk. He was last due to be in Britain on 12 September a year ago but was forced to cancel for obvious reasons. Now, holed up in Home House, a private members club just behind Oxford Street, he is conducting a whirlwind tour that includes an address to Amazon's UK troops in Slough and a punishing schedule of media interviews.

Dressed in his usual dot.com uniform of blazer and open-necked shirt, Mr Bezos cuts a relaxed figure in an internet sector which has gone from hero to zero in the past two years. His positive demeanour is perhaps no surprise because Amazon has emerged as one of the true survivors from the wreckage of the dot.com collapse. While rival internet darlings such as WebVan and eToys, crashed to earth, Amazon has continued to prosper.

Indeed the American entrepreneur, who founded Amazon near Seattle in 1995, is certain that the internet's biggest influences are yet to come. "I think the internet is still on Day One," he says, eyes bulging with enthusiasm. "If you look at it in terms of the development of the first aeroplane, we haven't had the DC-10 yet, still less the jet engine. You can't predict some of the really big changes. Who would have said that the development of the automobile would have led to suburbia? Or that the jet engine would lead to globalisation?"

However, he says there are some developments you can predict. "Every 18 months or so, microprocessors get twice as cheap. And bandwidth and disc space get twice as cheap every 12 months. What will happen is that we and other companies will figure out how to layer innovation on that abundance of cheap technology."

As an example he points to a new Amazon development called "Look inside the book". "This enables users to look at around 20 pages of a book on the website including the contents and the first few pages. The bandwidth required five years ago for that would have been prohibitive."

He also predicts a massive increase in the number of PCs in the home. "I think there will be multiple computers in the home. Most people don't have a PC at all and those that do have just one. I've just put another computer in my kitchen and my Amazon spend has doubled. It will change the way people shop."

Is he a gadget freak? "I am an early adopter which isn't always time-efficient. The new gadget I'm using is a Blackberry, a handheld e-mail device."

He says the boom and bust of the internet is not an unusual pattern in a new area of business. "This is part and parcel of a new industry," he says. "You get a lot of excitement and then everyone gets depressed. Then there is another period of growth and then everything becomes dull."

He remains proud of Amazon's own stock market performance. "We went public five years ago at the equivalent of $1.50 a share. The share price is now above $15 which is an amazing performance. The only trouble is it went via $100 during the internet bubble.

"If you look at what happened to the business during that time, in 1999 we had 14 million active customer accounts, by 2000 we had 20 million and by 2001 we had 25 million."

Amazon's other statistics look pretty impressive, too. The shares have been strong in a bear market, rising consistently during August and September. In July the company reported narrowed losses of $93m for the second quarter on sales of $805m. The figures were boosted by 30 per cent discounts on books costing more than $15 and free delivery for packages costing more than $49.

This followed Amazon's debut profit in the final three months of 2001, when the UK division also made its first profit. The business remains the UK's third-largest bookseller, behind Waterstone's and WH Smith, with a market share of about 9 per cent.

More recently Amazon has hired a new finance director from General Electric and expanded its Marketplace business which enables other businesses and individuals to sell new or second-hand goods on the Amazon website. Customers include sellers of video games, computer software and out-of-print books. Amazon gets 15 per cent commission on sales plus a cut of the delivery fee.

Another development which may be bought from the US to the UK is "in-store pick-up". Amazon is already running a system with Circuit City, the US electricals retailer, which enables customers to order goods from the Amazon website and pick them up the same day from their nearest Circuit City store. Possible UK partners include Toys R Us.

Mr Bezos says Amazon will also expand into new product categories in the UK, such as home and kitchen ranges, which includes food processors and crockery.

Where the otherwise loquacious Mr Bezos becomes less forthcoming is on the issue of "hot stocks", where some of America's favoured executives were offered stocks in flotations organised by Wall Street investment banks in the hope of winning lucrative corporate finance deals later on. Mr Bezos found himself with shares in one particular company via this route.

He says: "I was offered them in a number of companies but had historically declined. One of my brokers bought these shares and sold them at a modest profit, I think $5,000. But my business manager found out about it and stopped it. I've avoided it because it creates the mis-perception of conflict of interest."

He names the company as GameShop Corporation, a computer games retailer, but says he cannot remember the name of the broker. "It didn't go to the moon. I think I bought at $17 and sold at $18."

It's not as if he needs the money. His 29 per cent stake in Amazon is worth $1.8bn and he sold shares worth $15m in May.

Jumping around with enthusiasm, he says he still loves the job and has no plans to jack it all in.

"I'm here indefinitely," he beams. "I'm having a ball and it's incredible fun. I'm very grateful to have this job."