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

AMZN 233.95

+0.3%

Dec 1 3:59 PM EST

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To: Lizzie Tudor who wrote (71948)	8/5/1999 12:15:00 AM
From: Eric Wells	Read Replies (2) of 164684

Michelle - I do not deny that what Amazon has done is phenomenal - gaining $300 million in business in one quarter is amazing. But they gained a tremendous amount of marketing advantage from being the 'first' internet retailer (there was an awful lot of extraneous hype that surrounded Amazon's ascent). I think Amazon milked that marketing advantage for all that it was worth - but I see Amazon's opportunity to capitalize on hype as being gone now (if anything, there is negative hype now working against them). I would argue that because of the changing competitive atmosphere of the net, that it may be more difficult for Amazon to retain the market share (represented by the $300 million in book sales) than it was for them to capture it. I am a strong believer in e-commerce - but I believe the net provides a much different competitive landscape than one might conjure up in reading the analyses of Meeker and others, analyses that appears to suggest that companies that grab internet land first win. I don't believe this is true. I see www.wal-mart.com gaining a lot of market share next year. I am a firm believer that a stock price should have some relation to companies profits (past, current and projected future) - and not just revenue growth. Every time I have heard the name "Meeker" or "Blodget" over the past year, such names have always been associated with updated price targets of internet stocks - never have I heard such names mentioned with statements concerning profit projections or profit risk. Do you think that we would be in the same position today with regard to net stocks if over the past two years analysts had focused their reports and press releases on profit projections and inherent risks of business models, as opposed to setting stock price targets? I do believe that Meeker and other analysts have contributed to the volatility of these stocks - whether they did so innocently or if they purposefully propped up the value of these stocks beyond all reason is a matter for debate. I'm not pointing the finger at any one person - investors who have lost (myself included) bear responsibility for such losses. However, I cannot help but feel as though I have been fooled by an inclination on my part to think that statements coming from analysts at firms such as Morgan Stanley or Donaldson, Lufkin and Jenrette are based on some kind of science or something that might fall within the realm of that thing called 'finance'. However, I now believe I was fooled - that such analysis has been based on a lot of speculation. And whatever respect I might have had for investment banks is now gone - I see them now as a bunch of suits trying to figure out new schemes to take my money away from me. If I ever take my own company public I will never solicit the services of Morgan Stanley or DLJ no matter how high of a one-day gap up they may promise me. Thanks, -Eric

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