Amazon.com, Inc. (AMZN) Message Board

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

AMZN 237.91

+0.1%

11:58 AM EST

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To: llamaphlegm who wrote (10851)	7/19/1998 8:59:00 PM
From: Rob S.	Read Replies (3) of 164684

Another example of the kind of service that is on the net that you don't find much anywhere else. When was the last time you though about jetting out to the local mall and were able to check multiple malls and seperate businesses for the best prices and availability on the items you wanted, all within about fifteen minutes? If it's possible, I sure don't know about it. When commerce realy kicks into high gear, it will draw competitors and will make a big market and motivation for Portal site developers and discrete services to offer Shop BOTS and buying services. Al the major portals will have them and many new portals will likely use the Shop BOT as the central service they offer. Maybe the best ones will charge users. I'd pay $50 a year to be able to consistently find the best and lowest priced sources for products on the web. Or maybe they will be funded by advertising as Yahoo! is today. The service does run counter to the advertising biz modality. I think that in five years Amazon.com will be lucky if they are making 5% net margin and 1.5% net earnings. The stock is worth maybe $15 now and might grow to be worth $60 in a couple of years. ---- AMZN may well continue to ride the "irrational exuberance" of internet stocks. High growth rates are likely to continue for several quarters, but probably will continue to decelerate. The company has done a lot of advertising lately and that might help to boost sales numbers more than if they weren't willing to loose so much money. Higher sales seem to be part of what is driving the stock price because investors have a druggy expectation of what that will mean down the road. They expect high growth will eventually result in high margins and profits. I think that at best Amazon will have margins in line with other mass merchandisers and more probably will see lower margins because of the ease of competition on the internet. We will see which theory makes sense within several quarters. If sales continue to grow at the rates Amazon.com has experienced in the past and gross margins expand while costs go down, then I could be wrong an the stock could be worth about where it is now in less than 3 years. I'll bet anyone out there a case of their favorite beer that Amazon will not see high margins or earnings and the price will come down from where it is now within the next six months.

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