The Future of the Book

Amazon’s $3.6 Million Outage?

By posted at 10:40 am on June 8, 2008 0

On Friday, as you may or may not have noticed, Amazon went down for about two hours. These days, we’re used to 100% uptime from the internet’s supersites – Google, Yahoo, Wikipedia, et al – but the Amazon outage reminded me of the late 1990s when even the biggest dot-coms, struggling to scale to the explosive growth of the Web, suffered routine and sometimes prolonged outages. (Of course, some more recent start-ups still experience such growing pains).

As Amazon returned to service on Friday afternoon, speculation kicked into high gear about just how much revenue the world’s largest Internet retailer had lost during the two-hour outage. A little back-of-the-envelope math gives a rough idea. When the company reported its first quarter numbers, it estimated that it would have net sales of between $3.875 billion and $4.075 billion in the second quarter of this year. The midpoint of that is $3.975 billion: $43,681,319 per day or $1,820,054 per hour. So, theoretically, the outage lost the company $3,640,109, with the caveat that this is just averaging the numbers out and not taking to account how busy mid-day Friday is, as opposed to other times of the week. Regardless, a decent chunk of change.

Of course, as Silicon Alley Insider pointed out, “When customers who wanted to buy something from Amazon went to the site and found it down, the majority of them likely figured the glitch was temporary and decided to check back later this afternoon. And lo and behold–it was temporary. So they’re probably placing their orders right now.” So, in reality, the likely damage is probably minimal. It would take repeated outages for Amazon to start feeling the impact from downtime.





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