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

AMZN 234.70

-1.2%

Nov 14 3:59 PM EST

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To: jtechkid who wrote (1805)	2/27/1998 11:43:00 PM
From: Tom D	Read Replies (1) of 164684

<<i see barnes &noble going after hard in advertising to steal market share- price war>> How do you reconcile this statement of yours with the following statement from an institutional research analysts report: "Like it or not, Amazon.com has convinced the investment community that it is acceptable to operate with operating losses over the next two fiscal years.... Barnes & Noble does not have this same liberty, and noted so during its first-quarter (1997) conference call, stating that the company would not let its online business negatively affect its operating results." At year end 1996, Barnes and Noble reported absolute cash of $12 million (vs. AMZN's $50 million). As you know, for some reason (?) Barnes & Noble does not disclose cash levels when it reports quarterly operating results to the street. The cash level at the end of 1997 has not yet been released. When one considers the off-balance-sheet financing of the leases on the stores, the fiscal weakness of AMZN's competitors (BKS and BGP) begins to become apparent. Frankly, I don't know why anybody thinks BKS and BGP are in any position to compete with AMZN. AMZN is willing to plough >$100 million into losses to build an insurmountable lead in market share. BKS isn't willing to lose ANY money on their on-line business. Off-balance-sheet-financed leases on a lot of bricks and mortar, pathetic levels of sales per employee (compared to AMZN), massive inventories, and unwillingness to sacrifice short-term profits for long-term dominance do NOT add up to competitive fiscal strength. Best Regards, Tom D

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