1. AOL's an isp, massive infrastructure investment requires.
AOL is not an ISP. They contract out their network services.
2. Hence, AMZN virtually 0000 barriers to entry, AOL lots.
Border spent over six months trying to get their web site up and running. Either they had one programmer working on it, or there are quite a few barriers (plus borders had the advantage of already having relationships with publishers).
3. Intensity of competition. Vicious. Multiple players on line in a fragmented industry for amzn. AOL in an oligopoly.
Yeah, right. Prodigy, Compuserve, MSN, independent ISPs, AT&T, all those are puppies, not competition.
4. Threat of substitution. Large. On line e tailing may be replaced by portal-linked shop bots. Check out YHOO, Shopping, Music, they'll comparison shop for you at ~20 retailers. Acses.com, books.com, or the site I posted earlier this evening.
Substitution? MSN, Yahoo Online, Excite Online. But I guess those do not count.
6. Long term, why wouldn't a portal-linked shop bot, simply sample the suppliers directly and buy from the cheapest?
Have you ever been to Amazon's web site? Interview with authors, reviews from other readers, link to similar books. None of those could be offered by a portal-linked shop bot.
I can hardly believe I'm defending AMZN here, as I consider it overvalued (fair price around $15-20 per share), but some bears here are simply delluding themselves when they see no value at all in AMZN, and the specious arguments put forth by llamaphlegm illustrate this point perfectly. |
