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

AMZN 220.66

+1.6%

Nov 21 9:30 AM EST

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To: John May who wrote (10594)	7/16/1998 11:20:00 AM
From: Rob S.	Read Replies (1) of 164684

The BIG difference between Amazonianut.com and Yahoo! is that AMZN is an inet retailer while Yahoo! is an inet advertising and information broker (portal). Amazon had 22% gross margins which they say are shrinking (even before having to make huge infra-structure investments). Yahoo! has 70%-80% gross margins which are not shrinking. Amazonianut.com must put in a warehousing and distribution network. Yahoo! does not. Amazonianut.com must invest increasingly in inventory. Yahoo! does not - as a hub on the internet, they can serve as the interface to many e-tailers, getting a 10%-15% commission from each of them; Amazonianut.com cannot. The Forbes article was simplistic in it's analysis of the internet commerce wave; A discredit to their sometimes brilliant work. It was topical and will probably sell a lot of mags. I wish these comparisons between Amazonianut.com and Yahoo! would either stop or be more thorough. My prediction: Amazon management will either tone down the rhetoric and throw cold water on the rampant, under-educated and thought out speculation, or they will be faced with massive class-action lawsuits in the coming months. This degree of wild speculation based on "virtual" sales and profits as the company is being forced to become a structured, facilities based marketer or products will entice a flood of law firms to go after them.

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