Good day, everyone and welcome to the Amazon.com first quarter 2008 financial results teleconference. (Operator Instructions) For opening remarks, I will be turning the call over to the Vice President of Investor Relations, Mr. Rob Eldridge. Please go ahead, sir.

Hello and welcome to our Q1 2008 financial results conference call. Joining us today is Tom Szkutak, our CFO. Jeff Bezos, our Founder and CEO, and Tom will both be available for Q&A. The following discussion and responses to your questions reflect management’s views as of today, April 23, 2008 only and will include forward-looking statements. Actual results may differ materially. Additional information about factors that could potentially impact our financial results is included in today’s press release and our filings with the SEC, including our 2007 annual report on Form 10-K. As you listen to today’s call, we encourage you to have our press release in front of you, which includes our financial results as well as metrics and commentary on the quarter. During this call, we will discuss certain non-GAAP financial measures. In our press release, slides accompanying this webcast, and our filings with the SEC, each of which is posted on our IR website, you will find additional disclosures regarding these non-GAAP measures, including reconciliations of these measures with comparable GAAP measures. Finally, unless otherwise stated, all comparisons in this call will be against our results for the comparable period of 2007. Now I’ll turn the call over to Tom. Thomas J. Szkutak: Thanks, Rob. I’ll begin with comments on our financial results. Trailing 12-month free cash flow increased 51% to $788 million. The combination of common stock and stock-based awards outstanding was 435 million shares compared with 430 million. Return on invested capital was 32%, up from 30%. Worldwide revenue grew 37% to $4.13 billion, or 31% excluding the $185 million of favorable impact from year-over-year changes in foreign exchange rates. Media revenue increased to $2.54 billion, up 28%, or 21% excluding FX. EGM revenue increased to $1.48 billion, up 56% or 50% excluding FX. Worldwide EGM increased to 36% of worldwide sales, up from 31%. Worldwide unit growth was 31%. Active customer accounts exceeded $79 million, up 19%. Worldwide active seller accounts were more than $1.3 million, up 17%. Seller units were 30% of total units versus 29%. Worldwide gross profit was $956 million, up 33%. Now I’ll discuss operating expenses excluding stock-based compensation. Fulfillment, marketing, technology and content and G&A combined was $698 million, or 16.9% of sales, an improvement of 103 basis points year over year. Tech and content was $203 million, or 4.9% of revenue compared with 5.5%. Now I’ll talk about our segment results and consistent with prior periods, we do not allocate the segments for stock-based compensation or other operating expense line items. In the North America segment, revenue grew 31% to $2.13 billion. Media revenue grew 22% to $1.2 billion. EGM revenue grew 46% to $826 million, representing 39% of North America revenues, up from 35%. We saw another quarter of strong sales in electronics, toys and baby, consumables, and soft goods, which includes jewelry, apparel, shoes, and sporting goods. North America gross profit grew 29% to $569 million, and gross margin decreased 33 basis points to 26.7%, driven by lower prices for our customers and changes in product mix. North America segment operating income increased 52% to $130 million, a 6.1% operating margin. In the international segment, revenue grew 44% to $2.01 billion. Revenue growth was 31%, adjusting for the $179 million year-over-year favorable FX impact during the quarter. Media revenue grew 34% to $1.34 billion, or 22% excluding FX, and EGM revenue grew 71% to $655 million, or 56% excluding FX. EGM now represents 33% of international revenues, up from 27%. International gross profit grew 38% to $387 million, or grew 26% excluding FX, while gross margin decreased 81 basis points to 19.3%, driven by lower prices for our customers and changes in product mix, partially offset by increases in product sales by our sellers. International segment operating income increased 36% to $128 million, a 6.4% operating margin. Excluding the favorable impact from FX, international segment operating income increased 19%. CSOI grew 44% to $258 million, or 6.2% of revenue, up 29 basis points. Excluding the $14 million favorable impact from FX, CSOI grew 36%. Unlike CSOI, our GAAP operating income includes stock-based compensation expense and other operating expense. GAAP operating income grew 36% to $198 million, or 4.8% of net sales. Our income tax was $62 million in Q1, or a 30% rate for the quarter. We estimate our effective tax rate in 2008 will be approximately 30% and that cash taxes paid will be less than $75 million. However, there is potential for significant volatility due to several factors, including variability in accurately predicting the amount and mix of taxable income by jurisdiction and business acquisitions or investments. We are endeavoring to optimize our global taxes on a cash paid basis, not for tax expense on a financial reporting basis. GAAP net income was $143 million, or $0.34 per diluted share compared with $111 million and $0.26 per diluted share. Turning to the balance sheet, cash and marketable securities increased $830 million to $2.4 billion year over year. Inventory increased 43% to $1.08 billion and inventory turns improved to 13.1, up from 12.9 in the prior year, even as we expanded selection, improved in-stock levels across product categories and geographies, and introduced new product categories. Our investment in net fixed assets increased $152 million from a year ago to $594 million. Our Q1 2008 capital expenditures were $61 million. I will conclude my portion of today’s call with guidance. Incorporated into our guidance are the order trends that we have seen to date and what we believe today to be appropriately conservative assumptions. However, there is a high level of uncertainty surrounding exchange rate fluctuations, as well as the global economy and consumer spending. It is not possible to accurately predict demand and therefore our actual results could differ materially from our guidance. As we describe in our more detail in our public filings, issues such as marking our Euro denominated debt to market quarterly, intra-company balances and foreign currencies that settle amongst our subsidiaries, unfavorable resolution of legal matters and changes to our effective tax rate can all have material affect on guidance. Our guidance assumes that we don’t conclude any additional business acquisitions or investments, record any further revisions to stock-based compensation estimates, and that FX rates remain approximately where they have been recently. For Q2, we expect net sales of between $3.875 billion and $4.075 billion, a growth of between 34% and 41%. This guidance anticipates approximately 700 basis points of positive impact from foreign exchange. GAAP operating income to be between $120 million and $160 million, or between 3% growth and 38% growth. This includes approximately $80 million for stock-based compensation and amortization of intangible assets. We anticipate consolidated segment operating income, which excludes stock-based compensation and other operating expense to be between $200 million and $240 million, or between 21% growth and 46% growth. For the calendar year 2008, we expect net sales of between $19.1 billion and $20 billion, a growth between 29% and 35%. This guidance anticipates greater than 400 basis points of positive impact from foreign exchange. GAAP operating income to be between $740 million and $940 million, or between 13% growth and 43% growth. This includes approximately $285 million for stock-based compensation and amortization of intangible assets. We anticipate 2008 consolidated segment operating income which excludes stock-based compensation and other operating expense to be between $1.025 billion and $1.225 billion, or between 21% growth and 44% growth. Our goal continues to be operating leverage in 2008, with CSOI growing faster than revenue on a percentage basis. We anticipate our free cash flow growth rate to trend similar to our operating profit growth rate over time, with some variability, including from changes in working capital and excess tax benefits from stock-based compensation. We expect capital expenditures, including capitalized software development costs, to be approximately $300 million. We will continue to strive for year-over-year annual growth of free cash flow and free cash flow per share while investing in our long-term opportunities. We are confident that if we continue to improve customer experience and execute efficiently, our value proposition as well as our free cash flow will expand. Thanks and with that, Rob, let’s move to questions.

Thanks, Tom. Let’s move on to the Q&A portion of the call with Jeff and Tom. Operator, will you please remind our listeners how to initiate a question?

(Operator Instructions) We’ll take our first question from Jeetil Patel with Deutsche Bank Securities.

Thanks. A couple of questions; first of all, philosophically do you think your customers have a greater propensity to buy or show greater loyalty to your retail business and the third party, and I guess does that influence what the lifetime value of a customer is that is buying across let’s say retail or prime versus the third party business? And then second, now that you’ve rolled out internationally third party and prime, are you getting the type of incremental leverage from selection and reduced friction on the e-commerce side that you saw in the U.S. I guess over the last year and now you are seeing from an acceleration standpoint? Jeffrey P. Bezos: I’ll take the first one. I think what our customers are focused on is whether they are getting excellent service in every one of their transactions and certainly for Amazon Prime members, we’ve raised the bar and offered the ability for customers to get products very, very quickly, very low cycle times, from the time they place the order until we are shipping it out our dock door and then it gets to the customer in two days for free. And what we are working to do with fulfillment by Amazon is make it possible for third party sellers to stow their inventory in our fulfillment centers so that we can offer the same level of service to our customers for those third party items that we do for the Amazon owned inventory. And we are seeing a lot of traction there. We are seeing a lot of happy sellers with fulfillment by Amazon and it is certainly great for customers, in part because they can get one box instead of two. So if they order something from Amazon and at the same time they order something from a third party seller, if we have that item in inventory we get to marry those two items together, ship them in one box. It’s a better customer experience. It saves transportation costs, transportation fuel, and it just works out better. There’s enough system wide cost savings that we can offer fulfillment by Amazon to the third party sellers at a very attractive price. But the driver of that program is, as with most things we do, starting with figuring out how we are going to make that customer experience great. We have this Amazon Prime customer experience. We want that to work for third-party sales and for third-party sellers.

Could you repeat the second part of the question --

Yeah, I mean, if you look internationally, you’ve done -- you’ve rolled out third-party and prime in some of the major regions over the past year. Are you starting to see that incremental leverage of both selection from your third-party side as well as the reduced friction from prime helping to drive or accelerate growth as you’ve been seeing in the U.S.? Thomas J. Szkutak: Well, certainly with the third party, you know, we’ve had third party sellers in international for quite some time but we have launched some new features over the past few years with merchants at being more prominent in international. But we are very pleased with our third party sellers in international. It is certainly growing nicely, as well as the total is growing nicely. In terms of prime, we are very, very happy with what we are seeing but it is still very, very early and with a few countries just being launched a few months ago, and Japan about nine months ago, so we love what we see so far but it’s very early.

We’ll take our next question from Imran Khan with J.P. Morgan.

Thank you for taking my questions. Two questions; first, international operating income growth rate excluding foreign currency decelerate pretty significantly. I was trying to understand how should we think about international gross profit and segment operating income growth rate? And second question, in the U.S., can you give us some sense of, you know, if the U.S. economy slows and -- or continues to slow and if you see more price discounting from the other retailers, what kind of pricing you expect -- do you continue to maintain your price leadership and if so, how should we think about the gross profit dollar growth? Thank you. Thomas J. Szkutak: In terms of the international operating margins, what you are seeing is, if you take a look at it, it is really our gross margins were down year over year and what you are seeing is certainly lower prices in international was a piece of it. Also, if you just look at the mix of business, we had very, very strong growth in EGM, electronics and general merchandise. That was up 76% year over year -- excuse me, 71% year over year. Adjusted for FX it was up 56%, which is the strongest growth we’ve seen in quite some time in international. And if you think about it, if you look at a lot of the category launches that we’ve had, we’ve had approximately 16 category launches last year, so again a lot of these newer categories are starting and we are making sure that we have great prices right away, but we certainly don’t have the scale to buy yet in those particular categories. So you are seeing part of that. And then also offsetting some of those impacts of mix and pricing is certainly third parties growing at a faster rate, as well as COGS reduction. So that’s really what is happening in international and we think certainly adding a lot of new categories in that opportunity both for customers and investors over a long time is a good thing and it is something that we will continue to drive. In terms of the second part, our pricing strategy is very simple. We are going to make sure we have great low prices for customers. It is hard, certainly hard to predict what will happen over the course of the year but we think we have reflected what we do think is going to happen in the guidance that we’ve given today. But we are going to make sure that we have great prices and great selection and on top of that, this wasn’t part of your question but you know, we think that in this type of environment externally, customers want great value and so that is both in down times and up times, and we think that that’s good, and so we are going to concentrate and make sure that we have the right processes in place to make sure we have the right prices for customers.

Thank you.

We’ll go next to Heath Terry with Credit Suisse.

Thank you. I was wondering if you could give us an update on the third party business in Europe, particularly with your ability to attract the larger third party partners, like Martin Spencer and of course, Target in the U.S. You mentioned that third party is 31% of overall business. That number has been pretty stable for a while, despite the launch into Europe. Can you give us an idea of what kind of impact Europe is having and if there is some kind of offset in the U.S. that is holding that number at 30%? Thomas J. Szkutak: Sure. In terms of our -- we haven’t broken out separately the two segments but the third party business is doing very well in both segments, and so I can’t help you much with the international piece, but just a few data points on our total business, which includes international. You mentioned our third party units were actually 30%, which is up from last year, Q1 of last year. Also, our active seller accounts, which includes this globally, we had 8% growth last year Q1. We have 17% growth this quarter, so we are seeing nice active seller growth, and again that’s a global number. And we’ve had several quarters of sequential growth, including growing from Q4. So we are seeing a lot of positives from our third party business and as Jeff mentioned a few minutes ago, some of the things we’ve done with Fulfilled by Amazon is also very promising, again to try to make that experience better for both customers and sellers.

Great. Thank you.

We’ll go next to Scott Devitt with Stifel Nicolaus.

Thank you. Could you talk a little bit about your digital initiatives in your international markets in terms of timing? I understood that you have certain plans within Europe in 2008 and I was wondering if you could add some clarity around that. And then separately, just a bigger picture item, your long-term ambitions with payments, the Amazon payment site is live, you’ve launched flexible payments and also done an investment in bill me later, so I would be interested to understand what your longer term plans are there. Thanks. Thomas J. Szkutak: Sure. What we did say for international MP3, it will be sometime this year and so we don’t have anything more to add to that. In terms of the second part of your question, could you repeat it? It was Scott, right, that had the question?

The second part is just around your third party payment initiatives with the Amazon payment site that allows the bank account transfers, as well as balances and the flexible payment system, which allows developers to integrate into e-commerce sites and your bill me later investment. I’m trying to understand what your ambitions are with each of those platforms. Thomas J. Szkutak: You know, certainly beyond what we have announced, we think these are very interesting initiatives. It is still very early in all of them and we think that we can offer a very good customer experience, which will be for both developers and customers ultimately and we will have to -- you’ll have to stay tuned to see more on those.

Thanks.

We’ll take our next question from David Joseph with Morgan Stanley.

Thank you. As you’ve increased your revenue guidance for 2008, you’ve also kept your operating income the same. In other words, your guidance for margin came down a little bit. Our sense is that it is a little bit more of the same, you know, lower pricing in international, stronger EGM mix, but also are there -- were there increased expectations for spending as well? Also, in terms of the economy, it sounds like you are really not -- you are not seeing anything in terms of an impact to consumer spending. I’m just wondering if we can be a little bit even more granular -- if you saw anything during the quarter or even in April related to units per -- related to conversion or even units sold per customer or lower ticket sizes, maybe softness in certain categories that you may have observed that could be related to the economy. Thank you. Thomas J. Szkutak: In terms of the first part of your question about the increase in revenue and operating income, or CSOI, being the same as what it was before, I wouldn’t read much into it. It’s largely unchanged from 90 days ago and -- but in terms of what we are seeing externally, you know we don’t have a lot of data points on the economy. We have certainly a lot of data points on how our business is doing and as you can see from our results in Q1, revenue growth as well as operating margin -- we had strong revenue growth as well as good operating improvements year over year with operating margins up approximately 30 basis points. So that’s what we have seen in Q1 and what we think will happen throughout the year has been reflected in the guidance that we gave you today.

Thank you.

We’ll take our next question from Jeffrey Lindsay with Sanford Bernstein.

We wanted to ask and see if we can get an update if at all possible on sales taxes. Will Amazon be able to cope with collecting sales taxes if obliged to do so by the states, especially New York? And then also, if you could, could you give us any update that you can on sales of fresh groceries and wine sales. Is this still a novelty or do you expect to get any traction here? Thomas J. Szkutak: It would be early to comment on any state activity as it relates to sales taxes, but certainly we do collect sales tax or value-added tax in the states or countries that require us to do so, and we do that activity and approaching 50% of our total business. We do collect some type of sales tax or value-added tax. And we have great businesses in those states and countries that we do do that. And the reason why we do is because we are focused on the things that matter to customers, which is making sure that we do have great prices, that we are continuing to expand selections, making sure that we have more and more products in stock and available for immediate shipment. And those are the things that matter to customers. And so that’s what we are going. In terms of some of your other questions, in terms of groceries, we have really two things that we do. We have a consumable business today, which is a dry goods business that we are very pleased with. It’s still very early but we think we like what we see so far. The other part is we do have small pilot going on related to fresh groceries. It’s in the Seattle area here locally where we are testing groceries. But beyond that, again it’s just a test that we are doing and we will see how that works out.

We’ll take our next question from Justin Post with Merrill Lynch.

A few things -- Jeff, I saw your interview on the Kindle and I could sense the company’s excitement there. Any media sales, either through the Kindle or some of the stuff you are going in music of video, affecting results, either revenues or margins at all at this point? A second question -- we saw the other revenues really tick up. I think they are going close to 40%. Is that anything to do with web services? And finally, Tom, could you just remind us what your currency guidance was back in January? I believe it was 400 basis points for the year. At this point, I just want to remind us where it was when you got it in January. Thanks. Thomas J. Szkutak: It was 200 basis points in January and now it is 400. In terms of digital, we are extremely happy with what we are able to offer customers but certainly we have a considerable base of revenue today, so it is very, very early but we are very pleased with the traction in each of the initiatives that we have out there and apologies for not breaking it out any more detailed than that.

And then on the other, what drove the growth year over year? Thomas J. Szkutak: You know, other is a combination of a number of things, including some of our Amazon enterprise services, certainly web services would be a part of that as well, and so again there’s a number of things that are included in that.

Thank you.

We’ll take our next question from Mark Mahaney with Citigroup.

Thank you. Two or three questions, please. The ROIC trend, that 32% clearly up on a year-over-year basis but since it’s a trailing four or five quarters calculation, is there any particular reason why it would have lagged down from the 50% levels or materially higher for the last couple of quarters? And then secondly, just in terms of the overall revenue mix or product mix, are you seeing any trend, material trend towards purchases of staple items, consumer staple items on your site away from maybe more traditional media entertainment, consumer discretionary items? Thank you. Thomas J. Szkutak: In terms of the first part of your question related to ROIC, what you are seeing is certainly versus last quarter, free cash flow is very strong but wasn’t as strong as it was on a trailing 12-month basis ended 2007, which is certainly a key driver. And a lot of that is just really seasonality associated with our business as it relates to our operating cycle, which you can see. In terms of -- can you repeat the second part of your question related to consumables?

Are you seeing amongst the Amazon customer base a shift towards or an increasing of the basket or the bundle as people check out that includes more consumer staple items -- you know, the simple things, the toothpastes, the hair brushes, things like that? Is there something in there that indicates that the increasing wallet share is coming not just from cross-selling media consumer electronics but actually cross-selling consumer staples? Thomas J. Szkutak: Yeah, there’s not really a lot I can comment on that. Again, what we are seeing though is if you look at our results, you are seeing very broad strong growth across the key sales breakouts that we have, and that’s not just globally. You are seeing it in the individual segments. You are seeing strong media growth as well as EGM in both segments, and so you should be thinking about it that it’s very broad.

And then one last question; it has to do with any recessionary impact? I know you’ve been kind of asked about this before but just to be clear, is your position that you are not seeing any impact from the recessionary environment in the U.S., either in terms of demand for certain categories, demand for certain price points, or that you are? And if you are, how are you seeing that impact? Thomas J. Szkutak: Well, what we are seeing is -- you know, you could see at a -- based on the results that we’ve just published in Q1, globally our revenue increased 37%. You see that in both segments excluding the impact of exchange rates, both grew faster than 30%, which is -- which we think is very strong. It was very broad, as I had mentioned. So it’s difficult to say. We don’t have a lot of data points around the economy, so it is difficult to say what is going on there. We are seeing what we see within our business, which is some pretty good strength across categories. And again, we think it’s driven by a lot of the things that we talked about earlier. It’s just making sure, continuing to have great low prices, increasing our selection, making sure that we also have in-stock levels where we want them to be. We’ve been improving that a lot over the past few years, and so those are the things that are driving the growth.

Thanks for the detail, Tom. Thank you.

We’ll take our next question from Doug Anmuth with Lehman Brothers.

Thank you for taking my questions. First, media sales have been strong for some time but it looks like there has been a more material deceleration in 1Q in the U.S. Is there anything in particular that you would attribute that too? And then secondly, can you just confirm -- is Audible now a factor into the guidance? Was it factored in three months ago and how much are you expecting from Audible in ’08? Thank you. Thomas J. Szkutak: It is factored into our guidance. It was not factored into our guidance 90 days ago and we are not breaking out the detail of what that is for 2008. But in terms of our overall growth in media, you know, we are actually pleased with it. I mean, North America is a -- you know, it’s a 20% growth -- excuse me, it was 22% growth, 21% ex FX. If you go back to Q1 last year, it was 21%. So we are still seeing strong growth in international. We also had 22% growth ex exchange. So again, it’s -- we are still very pleased with the growth rates we are seeing there.

And Tom, can you also just provide some color on the increase in stock-based comp for the year? Thomas J. Szkutak: Sure. The pieces, we did increase both stock-based compensation and intangibles. Keep in mind that we did have the acquisition of Audible, and so there is a piece of that that’s amortization of intangibles, which is Audible related, and there’s a piece that is stock related.

Thank you. Thomas J. Szkutak: Essentially it’s related to forfeitures on the stock-based comp side, is the largest piece.

Thank you.

We’ll take our next question from Aaron Kessler with Piper Jaffray.

Just a couple of questions; first, going back to the economy, any sense -- are people changing maybe their average order sizes or any impact you are seeing on larger ticket items? And also, in terms of seasonality throughout the quarter, can you comment at all on how that may have changed? It seems like it got a little slower in March than it was in January and February, so just maybe any commentary on seasonality throughout the quarter. Thank you. Thomas J. Szkutak: In terms of the economy, I’m not sure I can add a lot more to it. We saw what we thought was strong growth in Q1. We thought it was pretty broad-based across categories and we feel good about it. Certainly 31% growth is not the growth that we saw in Q4, 31% ex exchange. It was 37% in Q4. But we are certainly overlapping some pretty good growth rates back in Q1 of last year and despite that, we actually -- if you compare our growth rate in Q1 on a dollar basis or ex exchange, we had an acceleration from Q1 of last year. And you could argue that the economic environment at least what I am reading as well as I am sure what you are reading, looks tougher. And so not as strong as Q4 but certainly stronger than we saw in Q1 last year in acceleration. Again, it’s across categories so we feel good and it’s broad-based.

Just a quick follow-up; revenues seem to be growing much faster than unit growth, where they used to grow closer to in-line. Is that just due to the shift to the electronics and other category or is there another reason for that? Thomas J. Szkutak: Could you repeat the question again?

Revenues seem to be growing faster than unit growth over the last few quarters, where they used to grow more in-line. So is that just a shift really to the electronics and other category from more BMV? Thomas J. Szkutak: I would look -- I would actually make sure you are taking out the impact of exchange when you look at it, because certain exchange is impacting us quite a bit. Again, our growth rate for units this quarter was 31%. Our revenue ex exchange was 31% and again, 37% on a dollar basis.

Thank you.

We’ll take our next question from James Mitchell with Goldman Sachs.

Thank you very much for taking a couple of questions. First, is it reasonable to assume afar from the jump in unearned revenue that that would to some extent reflect sales of Kindles and Prime payments? Thomas J. Szkutak: You are breaking up a little bit. Could you repeat the question again, please?

I’m sorry. If I look at the jump in unearned revenue on the unearned revenue inflows on the cash flow statement, would that reflect sales of Kindle and Prime payments increasing? Thomas J. Szkutak: It has a number of things that would be included in that, but certainly those elements would be included in there, yes.

Okay, and then if I look at the general and admin costs, they seem very well-controlled in the latest quarter. Should we expect that trend to broadly continue going forward? And if it does tick down from roughly 2% to roughly 1% of revenue -- Thomas J. Szkutak: You know, we -- it’s been a relatively small percentage of revenue over some time and we are not giving guidance on any particular line items. I’m not sure I can help you much with that one. Apologies.

Okay, and then just finally for me on the gross margin trends, if you look internally at gross margin trends within categories, can you provide any color on whether the recent flattening in gross margins year-on-year is due more to priced reductions within categories or to category mix shift from higher gross margin to lower gross margin categories? Thomas J. Szkutak: The way the dynamics, I guess, of thinking about gross margins, the way I would describe it would be this -- we’re not breaking out individual categories but certainly we are trying to be -- make sure we are as competitive as possible, and that’s on each item, and each of the categories that we have globally. And offsetting that, we certainly are continuing to try to make sure we get good COGS reductions from suppliers. You should assume that when we launch new categories that generally, those are lower gross margins. So in other words, we are trying to price our products day one competitive, but we don’t have the buying ability to -- or the scale to buy at certain prices from vendors because we don’t have the volume. But certainly that changes over time. And then as these individual categories get more traction, usually there’s a better third party representation of those categories. So I don’t know if that’s helpful. It doesn’t quite answer your question but I think directionally hopefully it does.

Thank you.

We’ll go next to Brian Pitz with Banc of America Securities.

Thank you. In terms of your guidance, are you factoring in or do you expect any impact from the U.S. economic stimulus plan rebate? And just separately, any comments on why the Kindle remains supply constrained? Thanks. Thomas J. Szkutak: In terms of our guidance, we factored in certainly all things that we can think of that will impact our business, you know, leading up to the call. And so we look at recent trends. We have our categories, provide forecasts of our business globally. We have a number of different models, so all of those things that we try to take into account when we give guidance. Jeffrey P. Bezos: I can comment on the Kindle. The team here has worked incredibly hard since launch to increase the supply chain, to increase manufacturing capacity, and they have done a very good job at that. And just as of a couple of days, Kindle is where we have always wanted it to be, which is in stock. So we are very excited about that. We have worked hard to get Kindle detail page to say Availability: In Stock.

Great. Thanks.

Our final question will come from Steve Weinstein with Pacific Crest.

Great. Thank you very much. This may have been asked a lot of ways but I’ll [ask one more] directly; if I look at your guidance for the full year, if I take into account the changing currency assumptions, the acquisition of Audible, and the upside of the Q1, it looks like you are guiding down revenue for the next three quarters by about 3%. And so I’m wondering if that reflects any change you are seeing in the demand environment or if that reflects tactical changes that Amazon has planned for the rest of the year? Thomas J. Szkutak: I wouldn’t read too much into it. We have certainly raised our guidance. If you look at the bottom end of the range of our guidance for revenue, it reflects certainly some changes in currency, in the acquisition that you mentioned. And I wouldn’t read too much into it. We still -- the most recent performance that we have is Q1 and we thought we had very strong performance, both on the revenue growth and operating profit standpoint and we feel good about the business. But based on the -- you know, our best forecast for the year, we think the guidance is appropriate.

Thank you.

Thank you for joining us on the call today and for your questions. A replay will be available on our investor relations website at least through the end of the quarter. We appreciate your interest in Amazon.com and look forward to talking to you again next quarter.

That does conclude today’s conference. Thank you for your participation. You may disconnect.