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Technology Stocks : Amazon.com, Inc. (AMZN)
AMZN 226.76+2.5%Dec 18 3:59 PM EST
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To: Tie Zeng who wrote (3755)5/1/1998 8:03:00 AM
From: Winter  Read Replies (1) of 164684
 
>>I want to make my original point clear.<<

I think I understand what you are saying about AOL, basically anybody can setup a local ISP cheap and then try to grow it. In that sense barriers to entry for the ISP business are low.

However if you are using AOL as an example of why the largest/older company has an overwhelming advantage over newer startups in a given section, then I disagree. My ISP which is regional provides much better service than AOL at half the price. Personally I think AOL will not end up being the dominant ISP in the future as their service really sucks and eventually people will get smart and realize this. And switching ISP's is more traumatic than switching net booksellers.

Similarly I don't think the barriers to entry to compete with Amazon are that high. Sure they have the lead with market recognition now but they are facing competition from places other than little startups - the big boys of the retail bookselling world are joining the fray and they bring a lot of established brand recognition with them (B&N).

I don't think this spells the end of Amazon but I think the rosy growth and profit scenarios predicted will not come to pass as Amazon becomes one of many internet retailers who sells books.
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