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Technology Stocks : Amazon.com, Inc. (AMZN)

AMZN 226.19

-1.8%

Dec 12 3:59 PM EST

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To: Electric who wrote (68713)	7/22/1999 1:51:00 AM
From: Eric Wells	Read Replies (1) of 164684

>>Keep in mind that this is a new medium. The fact that the internet is a new medium makes it all the more riskier. Belief in Amazon's future success is based on belief that there is a tremendous first mover advantage to getting established in numerous businesses on the net - Amazon wants to be first everywhere. Of course, no one really knows if there is a tremendous first mover advantage. I see the internet as having very low switching costs - a user can easily jump from one site to a competing site (with much greater ease than a customer might go from one bricks & mortar store to another). Low switching costs diminish the value of first mover advantage. >>were you on the internet 4 years ago? Yes - I've worked in the software industry for twelve years now - was on the internet in the 80's before the introduction of the World Wide Web. >>They may have been in business 4 years >>but keep things in perspective. Four years is a long time to go without making a profit. >>My point is when businesses fail it is >>usually when their margins are dropping. I don't claim to believe that Amazon will fail. I think they are spreading themselves too thin. I believe a more prudent approach would be for them to prove that they can make profits in doing business on the web - and then perhaps expand at a slower pace. Instead they are making a big bet that their model will work and expanding as fast as they can. Any business venture is a bet. However, some bets carry less risk than others - I think the risk that Amazon is taking is tremendous. >>Me? I want to see more mergers when >>prudent and more increases in Gross Revenues I want to see profits. -Eric

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