WAH,
You're right, of course, there's little evidence of "close to profitability," but loss for 1Q98 was less than 4Q97, so trend of losses may have bottomed. In Bezos letter to shareholders he made it clear, his first priority is market share.
You're right again, "bricks & mortar" crowd is not going to abandon shopping mall stores, but all they have to do is shift a portion - 10% - 20% of their purchases to the net to make AMZN a very big company provided they maintain a respectable net market share.
BKS did $15 million in the approx. 6 months you referred to. AMZN did $105 in same period. Lot of catching up to do for BKS. I guess that what was referred to as "getting act together." And, of course, BGP is not even on the playing field; they've missed the boat big time.
As for brand, Amazon's come out of nowhere, and most people familiar with the net know Amazon. Few people in my area of the country had heard of Barnes & Noble until they opened a store here about two years ago. I'd say Amazon's done an amazing job of creating a popular franchise.
The final quote in your note, "every Internet sale for BKS is a loss in their store" is true in that they have a large share of the bricks & mortar trade. What he didn't say is that the net sale eats into their profits, since it's often made at a lower price than they'd get in the mall. BKS has no choice but to cannibalize their own trade, and their profit margins are razor thin. They're stuck.
John |
