I think a lot of brokerages and amazon speculators will be putting in a "last ditch" effort to pump the stock up so that they can unload without driving the price down much. Amazon.com's sales momentum has been dropping fast recently despite the favorable comparisons to year ago numbers. If you look at sequential, qtr. to qtr. comparisons, that becomes much clearer. As we move forward, the percentage growth numbers will become harder to maintain and will drop more rapidly. As big as the internet is and as fast as it is growing, Amazon.com is reaching a point where they are saturating the market and meeting with serious competition for the first time.
Here is some of the out-of-step thinking of H & Q's Jamie and other's who call themselves anals (is he a boy or a girl? No one will ever know):
1] Assertion; Amazon.com has a clear technical advantage due to in-house developed e-commerce and client filtering and active database push software systems.
Rebuttal: Amazon.com HAD a clear technical advantage when they were forced to develop their own back-end and web software systems. That advantage has evaporated and is now just boils down to implementation. Amazon itself has begun using third party software systems for primary filtering, content/page push, and reporting capabilities - the leading edge functions in e-commerce today. Borders, Barnes & Noble or anyone else can buy THE SAME or similar software from THE SAME or similar companies. Maybe the hardest part of doing this is deciding which of the many offerings is best suited to the companies particular server systems and web development environments.
2] Assertion: Amazon.com has developed brand recognition and momentum that competitors can not catch up with.
Rebuttal: Jamie must have snoozed or covered his/her ears and refused to listen to the findings of many internet usage studies and explanations of Amazon.com's CEO; Amazon.com has developed it's business by concentrating on the customer and delivering a superior web experience. That boils down to useful search engine capability, well indexed references to similar offerings, highly responsive database and page generation server systems (fast response) and clean and responsive page content. Amazon was maybe the best early adopter of active database server technology, but, as stated above, that differentiation has evaporated and now amounts to implementation. Visit Amazon's competitors and see that their offerings have closed the gap.
3] Assertion: Amazon.com has a market momentum leadership position that others cannot duplicate.
Rebuttal: Amazon.com does have market share leadership but momentum has already started to falter. Barnes & Noble and Borders have just put in place the technical and page authoring capability to be competitive. Now that the systems stuff is in place, the ad campaign has begun to be effective. It takes both of these elements to amount to serious competition.
4] Assertion: Amazon.com has over 60,000 associate sites that it pays commissions to that are ardent supporters of Amazon's business and who create widespread grass-roots visibility.
Rebuttal: This is one of Amazon's greatest stengths and differentiations. A great use of the power of the internet. However, Amazon.com has no proprietary lock on this method. Barnes & Noble now offers a similar Associates program. Other competitors can offer as good or better programs to compete against Amazon.com and other big companies.
5] Basic Assumption: Internet e-tailing will become dominated by just a few leading companies, such as Amazon.com. They will have a great advantage over their rivals and will control market shares similar to software giants or broadcast media giants.
Rebuttal: This argument is flawed. The internet is not similar to broadcast technologies. It is inherently a multi-point to multi-point technology with free exchange of content being the most common denominator. Broadcast technology is a point to multi-point one-way technology with pay for ad view being the most common denominator. Attempts to turn the inet into a broadcast media have failed to draw substantial interest even though huge sums of money have been thrown at the effort by MS/NBC, Netscape and others. Turning the internet into the boob tube is truly ANAL thinking (as in Anal. . retentive . .ysts). Jamie didn't listen to Bezo's wise comments during the conference call: Amazon sees a proliferation of portals and competition developing. Bezo still fails to see the entire impact of his own perceptions and reasoning: mass ad-push marketing on the inet should not be the primary focus. The associates program should take center stage. It offers far more leverage and maneuvering room to creative marketing. Internet e-commerce will be huge. The biggest portion will be business-to-business. It will not be dominated by one or a dozen large companies.
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Poor Jamie and other anals will get with the program one of these days, give credit where its due and gain an understanding for where the internet and Amazon.com are headed. The results are starting to make that clear and it will become very apparent (even poor Jamie won't be able to ignore it) in the next few quarters. Amazon.com will remain a leader in early e-tailing momentum but will be joined by several worthy competitors at the big company level in what will increasingly become a price competitive, low margin business. Amazon.com will also be met with a growing ground swell of smaller competitors who are now able to take advantage of avialable web tools to deliver similar or superior web experience, specialized content, and personal or community service. |
