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

AMZN 226.10

+2.5%

Nov 24 3:59 PM EST

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To: umbro who wrote (11424)	7/22/1998 11:42:00 PM
From: Rob S.	Read Replies (1) of 164684

I think that whatever investment institutions and large investors still have in Amazon.com will be cleared out within the next week or so. The analysts and media may put a bullish face on things long enough to sell at a healthy profit. Then the stock retreats. Maybe it will be down without a further move up at all. Here's some of the "rest of the story" that didn't get told in the press release and shallow media reports; Shawn Gumpolt (sp? - not too sure about this name), at B.T. Alex Brown, asked about "how price elastic will customers be . . ." as the company moves forward and how will the Amazon deal with portals and become more of a portal site itself. A nice portion of Amazon's marketing expense has to go to pay Yahoo! and other portal sites for banner ads. The recent arrangements with Intuit is even more costly per pop and takes a fixed, long-term commitment. Bezos did not answer the question about customer price elasticity directly, either because he didn't want to give out the information or he didn't know. Recent studies by Coopers & Lybrand and Georgia Tech Graduate dept. indicate that competition on the internet is expected to grow dramatically as the ease with which price comparisons are made is facilitated greatly compared to traditional shopping methods. Bezos did go on to say that he saw "lots of room for new portals to be established. I do not see Amazon becoming the primary source of revenue for any of the portals." "We don't feel that after three years that we will be done with portals." . . meaning Amazon.com will continue to rely on them to do advertising. My thoughts are that no single point source will gain dominance on the internet. The same basic argument that applies to brokerages applies here. All brokerages aren't going to be absorbed and taken over by E-Trade.com. Why do some analysts think that things will be 180 degrees different with Amazon.com? Aren't there now just a few e-brokerages who "control" a large percentage of on-line brokerage? Does that mean that their firm is barred from doing business on-line? Does that mean Datek will soon pu their firm out of business, maybe in just 2-5 years? Give me a break! Quit the wild speculation just because you don't know enough about this new industry. The analysts that make such assumptions should be sent back to B-school to consult with their professors who must have taught them from "the black magic book of business voodo". ----------- Break to another post.

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