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Technology Stocks : AMAZON.COM -- WORLD LARGEST BOOKSTORE

AMZN 231.15

+0.8%

12:48 PM EDT

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To: Mo Chips who wrote (16)	5/16/1997 12:54:00 AM
From: Larry Abrams	of 43

It's hard for me to see why AMZN should have a market cap 1/3 as large as B&N. The possible answer I have is "ROI" --return on investment. AMNZ has no leasehold or inventory (having publishers drop ship orders to customers). While its profit margins are lower than B&N, it ROI will be significantly greater. I completely disagree that in the long run, there will only be "mass" marketers and no successful "niche" companies. There do exist successful book chains---catering to the "information age" crowd that exist along side "mass" marketers. In Silicon Valley where I live, Stacy's is a very successful "niche" chain specializing in just the sort of books found on AMZN's "hot 500" list. While books-buying has declined among the "masses", books have become an important item for high-tech, or "information age" companies. I believe that AMZN, by touting that it is a specialist, will compete successfully against B&N for these corporate accounts. I also see the following analogy: AMZN is to B&N as DELL is to Compaq. That is selling direct to Fortune 1000 companies as opposed to selling through retail boxes. BTW, I am a small shareholder in AMNZ.

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