CS,
I got the DLJDirect analyst report written by Jamie Kiggen (Jamie is a 'he'). If you want to talk to him, he can be reached at 1-800-922-9004, extension 8985. Anyway, this is what he says "We believe that AMZN may be one of the great Internet investment stories of the next five years, a conviction that only expands with every new piece of information we get on this company. That the Internet has become a viable retailing medium is largely due to Amazon's success at creating a 'total value' commerce experience for consumers through its laser-like focus on each of the critical components of Internet retailing. This skill set, composed of branding, content development, backend technology and fulfillment, separates it from every other Internet retailer, and when combined with its 2.3 million happily transacting customers, provides it with a massive competitive barrier, not only in its native book market ($82 billion), but in any additional vertical category it chooses to enter, such as music ($10 billion) which it is in the process of launching. Considering that a recent study by Price Waterhouse predicts over $90 billion in consumer transactions will migrate to the Internet in the next five to ten years, early Internet retailing execution should be a considerable source of value. One could make the case that Amazon today has a similar sort of opportunity that Wal-Mart had in 1970. Unfortunately, AMZN is not likely to ever be a value play, even when it pulls back as it has recently. Make no mistake, though, we believe the long-term trend for AMZN will be relentlessly positive." |
