Linux switch saves Amazon megabucks

Telco price cuts also help

Amazon.com has saved up to $17 million this quarter by moving to Linux.

In the 10-Q form (basic quarterly filing) filed with the Securities and Exchange Commision (SEC) yesterday the online retailer revealed a spend $53.8 million on "technology and content" expenses for its Q3, compared with $71.2 million a year ago. Amazon switched to the open-source Linux operating system in June so this is the first chance to look at the effect it has had.

The filing states: "The decline in absolute dollars spent during the three months and nine months ended September 30, 2001 [on technology and content] in comparison to the corresponding periods in the prior year primarily reflect our migration to a Linux-based technology platform that utilizes a less-costly technology infrastructure, as well as general price reductions for data and telecommunication services due to market overcapacity."

The reduced cost of Linux is also noticeable in the company's nine-month figures, where technology and content expenses have fallen from $199.5 million to $188.8 million. Last quarter's figures were $64.7 million down slightly from $67.1 million the year before. And six-month figures saw expenses up on the year before - $135 million from $128.4 million.

Amazon will also be delighted to be saving money since the Q3 figures were not up to scratch and it warned that Q4 would be shaky as well. It has vowed to get into the black very soon and $17 million savings a year will help.

The filing should be on the SEC's Web site tomorrow - go here for a search. Or go through Amazon's site here. Beware though - it is a huge file.

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