Jim Cramer's Article on AMZN tonight:
Remember the AOL!
By James J. Cramer
9/29/99 6:01 PM ET
When we started TheStreet.com in 1996, America Online (AOL:NYSE) was paying tons of people for content. To me that meant opportunity. Heck, I knew we had actionable interesting copy, it was just a question of how much they would pay. Maybe they would even buy a stake in us. They were the pot at the end of the rainbow, and an awful lot of media companies had reached it.
We had discussions and discussions and then more discussions. And then one day AOL came to see me in my offices with a proposal. It looked a total winner: anchor tenancy, fantastic placement -- I kept thinking, man, this is going to cost them plenty, despite all of the exposure.
Then we turned to the last page. We had to write a check to AOL. Bob Pittman had come aboard. He had decided that AOL was powerful enough to change the business model.
I laughed. I said people would never pay them to get read. They told me people already were. They urged us to do a deal before they raised rates!
We swallowed our pride and we played ball.
And, soon after, I went from being an AOL bear to being an AOL bull.
That was a gazillion points ago.
Today Amazon.com (AMZN:Nasdaq) revealed that it, too, is changing its business model. It has enough customers that it believes businesses will pay AMZN to be in the mall.
I heard all of the skeptics today. They sounded like me when I wanted to tell AOL that I was outraged that they had switched the game.
I could not, this time, afford to bet that Amazon would be wrong. Amazon isn't pitching me the way AOL did a few years back, so I won't know first-hand.
But if Amazon gets people to pay -- and I think they will -- this is the same switch that Pittman pulled off at AOL. And you will have to be long, not short.
The amazing thing about all of this is when I switched direction on AOL a few years ago, people thought I was an ignorant, moronic flip-flopper. They thought I had no backbone, that I was a weenie and a coward and a fool.
Funny, they are calling me that again. Let's hope it turns out to be as lucrative this time around.
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