Why isn't Amazon.com talking about its $150 million windfall?
Amazon.com got a big payday when eBay bought Bill Me Later, the payment service, for $945 million earlier this month. So why isn't it admitting it? In an SEC filing, Amazon.com didn't name Bill Me Later as the source of a $150 million cash payment it will receive in return for an investment. But it's obviously Bill Me Later, which Amazon.com invested in last December. Here's the curiously vague wording of Amazon's disclosure to shareholders, and three possible reasons for it.
Note 10 - Subsequent Event In October 2008, a third party announced the acquisition of a company in which we held an equity-method investment. Subject to the closing of the acquisition, which is expected to occur in Q4 2008, we will receive approximately $150 million in cash for our equity ownership.
- Jealousy. Amazon.com CEO Jeff Bezos wished his company, not eBay, had bought Bill Me Later, and didn't want to give his rival credit.
- Remorse. Did Amazon.com actually profit from its Bill Me Later investment? We may learn more next quarter, but note that Amazon only disclosed how much cash it received, not how much money it made.
- Shame. Bill Me Later charges a 19.99 percent interest rate, which is higher than many credit cards. Sure, that's lucrative — but does Amazon want to be associated with a website personal-finance experts say you shouldn't touch "with a 10-foot gift-wrapped pole"?