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

AMZN 226.19

-1.8%

Dec 12 9:30 AM EST

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To: Jan Crawley who wrote (11919)	7/28/1998 11:01:00 AM
From: umbro	Read Replies (3) of 164684

Counting the Internet Chickens URL: investor.msn.com Here's the lead in: Confounded by Yahoo!, Amazon.com and Excite? Here's a way to analyze which high fliers are in trouble and who's really out front. By Jim Jubak I've learned a thing or two as I've watched almost every Internet company that counts report quarterly financial results over the last few weeks. Oh, I don't pretend that I've suddenly learned how to calculate a fundamental value for any of these stocks -- most of which are still losing money. Is Yahoo! (YHOO) really worth $250 a share, as BT Alex. Brown announced recently? I honestly don't know. But I do know what numbers to watch if I want to figure out which Internet companies are in trouble and which are leading the pack. If you want to separate the rising stars -- the companies that look like they could grow up to earn real money someday -- from the fading rockets, watch what it's costing a company to attract eyeballs. ETrade (EGRP) is clearly in trouble by this measure. Amazon.com (AMZN) isn't as far along toward building a brand as investors may hope. And Yahoo! may have already buried competitors such as Excite (XCIT). Also: -- Amazon.com isn't as far along toward building a brand as investors may hope. The author goes on to make the point that AMZN spent $26 per new customer (in marketing and advertising), and that the co. is paying an increasingly higher cost for each new customer. This is not consistent with the idea of "building a brand" -- if the brand name is working, then each new customer should cost less and less. The article also discusses ETrade being in a similar position, and how Schwab has built a better brand. There are some links to other articles written on the topic of building a brand. Check it out.

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