Harry, come on! Four against one's not fair. I'll take on Candle, Bob and Don, but you're the final straw.
It seems to me we're debating something unanswerable. In my post to Candle I said the BKS is fighting a two-front war. They have incredible resources (pockets); that's true. But how much of those resources are they going to throw at the Internet? Granted, a significant amount; they want to succeed in this important new medium. But they're already deeply entrenched in a vicious retail battle with BGP that requires heavy investment in inventory, labor, building and equipment.
BKS and BGP are nearly the same size. The both have just under $1 billion in inventory. For BKS this represents 54.8% of their total assets; for BGP inventory is 60.9% of total assets. On 9/30/97 AMZN had less than $3 million in inventory, 4.8% of its total assets. How can this be? It must signal that Internet commerce represents a paradigm shift in retailing that renders traditional ratios (inventory to total assets; building & equipment to total assets) moot.
AMZN is commited 100% to Internet commerce. BKS is no doubt commited, but not 100% - it's not their fault, they have no choice; therefore, in the Internet arena, AMZN's pockets are probably deep enough to maintain their market-share leadership position. BKS has already said their goal for 1998 is $100 million in Internet revenues. Based on its growth curve, AMZN should do more than double that, and they will lose a lot of money, but not so much, as Candle predicted, that they will falter and go under. That's wishful thinking.
John
Anyone want to take bets on the Carolina/Duke game on 2/4? |
