December 08, 2004, 1:25 PM — Amazon.com Inc. should consider providing more details about the outage that affected its Web site Monday for the sake of customer and investor confidence, some industry observers say.
Considering that tens of thousands of people are likely to have experienced various degrees of difficulty with Amazon's Web site Monday, observers say the online retail giant might do well to disclose the cause of the outage and the steps being taken to prevent it from happening again.
Amazon acknowledges the problem and attributes it to having "complicated systems that have problems from time to time," Amazon spokesman Craig Berman said. "That's what we're saying. I don't have any information on what to attribute it to other than that."
Amazon would be well served to be more specific and candid about the snafu, particularly since it happened during the company's busiest sales season, an analyst said. "I hope Amazon doesn't just try to let this blow over and not explain what happened because obviously it happened at a critical time for their business. Consumers and investors really want to know what Amazon is doing to rectify this, so that problems like this one don't happen again," said Patrick Mahoney, consumer technologies and services analyst at The Yankee Group.
Mahoney experienced the outage first hand. He was on a holiday shopping spree at Amazon on Monday and after entering his credit card information and clicking on the checkout button to finish the transaction he was served a page that said something along the lines that Amazon's system was unavailable. He remained in the dark as to whether his order had gone through successfully until Tuesday, when he received the automated e-mail Amazon routinely sends to shoppers to confirm a transaction.
"This outage probably created a lot of consumer confusion," he said. "If you have entered your credit card number and it does appear to have gone through but you can't doublecheck that, then you might go back and do it again, and Amazon could then potentially have issues with double-purchasing and problems like that."
Amazon's site was intermittently inaccessible for about four to five hours during Monday morning Pacific Standard Time, during which about 20 percent of site visitors weren't able to get into the site on a first try, having to either hit their browser's reload button repeatedly to gain entry or come back later, said Roopak Patel, senior Internet analyst at Keynote Systems Inc., a company that monitors Web site performance.
Under normal circumstances, the Amazon home page takes two to three seconds to download, while during the problematic period Monday that average climbed to about 30 seconds, Patel said. "It was a surprise to see a site as big as Amazon experiencing this type of problem, considering it depends on the online channel for its revenue, and especially at this time of year," Patel said, adding that Keynote hadn't previously detected an outage of this scope at Amazon this year.
Amazon's Berman said he wasn't aware of any customer concerns tied to Monday's outage. However, it wouldn't be far fetched to assume there might be some level of customer apprehension, considering the large number of people who visit Amazon's Web site. (For the holiday season, Amazon has put a counter on the right hand column of its home page that gives the number of visitors to its site in the last 60 minutes. At the time of this writing, that number stood at 503,484 visitors.)
Amazon has in its favor a very good track record with its customers and a tradition of communicating clearly with them, which has generated over the years a high level of trust toward Amazon from its customers, said Patti Freeman Evans, a Jupiter Research retail analyst.
It's a good bet that Amazon's technology department has been feverishly trying to sort out the problem to make sure it doesn't happen again, and depending on what they find, it might or might not be necessary for Amazon to provide further details about the incident, Freeman Evans said. "If there's value to either investors or consumers on the information (they gather) then they should disclose it. If there isn't anything valuable there then I don't think they need to," she said.
For example, Amazon should provide further details if the outage was caused by a security breach of some sort that could affect customers who were on the site at the time, she said. Another scenario that would merit further disclosure is if Amazon is unable to determine what caused the outage, because an unexplained problem could potentially be recurring, she said. But if Amazon determines the outage was caused by an unexceptional and clearly understood internal problem, it might not be necessary for the company to go into details, she said.
