hjm, glen rob et al:
the first excerpt is from this week's BW -- special front cover about 21st century economy ... kindly notice that:
1. BW seems to think that amzn is a retailer, more specifically a book retailer more than it is the walmart or kmart of anything.
2. even as the second paragraph extolls the brilliance of amzn's business model (what would you expect a vc to say?), the first points out the seeds of doom for any middleman retailer. there goes business model #1 on to #2 and trying to compete with aol, xcit, seek, lcos, yhoo, msn, et al to capture referal fees for commerc.
the second excerpt is from last week's issue, i don't if it was posted here or not.
final thought: where do all the bulls go when the stock trends down, bateman, mark fowler, william harmond, tom d, kindly notice that the bears post through thick and thin ... you're thoughts are most interesting precisely when your position moves against, not when you're just cheerleading.
lp
But the next wave of Internet commerce will present as much of a threat to such middlemen as it offers opportunity for startups. After all,
warns Steve Johnson, co-director of Andersen Consulting's global electronic-commerce program: ''Your competition is always going to be just
a click away.'' The new wave will not just save money but create new electronic marketplaces--quickly turning business models on their
heads.
It's hard to find a more agile somersaulter than online bookseller Amazon.com Inc. (AMZN). Even though it's still losing money during its
expansion phase, analysts say it's successfully busting the rules of bookselling. Despite offering 3 million titles, vs. 175,000 for a Barnes &
Noble (BKS) superstore, Amazon carried only $17 million in inventory last quarter--2% of Barnes & Noble's. And while buyers pay Amazon
instantly with their credit cards, it doesn't pay publishers for the books until about 46 days later--a tidy float that reverses the economics of
physical stores.
The result: $240,000 in sales per employee, vs. $100,000 at Barnes & Noble. ''Amazon isn't about technology; it's about changing the business
model,'' says venture capitalist Ann Winblad of Hummer Winblad Venture Partners in San Francisco.
A NEW CHAPTER FOR AMAZON.COM
Business Week: August 17, 1998
Department: News: Analysis & Commentary: INTERNET
Headline: A NEW CHAPTER FOR AMAZON.COM
Deck: The book giant's high-tech buys could pit it against Yahoo!
Byline: By Robert D. Hof in San Mateo, Calif.
From the start, Jeffrey P. Bezos, founder and chief executive officer of
Amazon.com Inc., wanted to do more than just run the biggest bookstore on
earth--or in cyberspace. Now, it's becoming clearer how much more: On Aug. 4,
Amazon.com purchased two Net startup companies for a total of $280 million that
will help elevate his online store into an Internet commerce hub--like Yahoo! and
other Web portals, but one aimed at shoppers, not merely fickle cybercruisers who
want to hang out, browse, and chat. Says Bezos: ''Our goal is to be an E-commerce
destination.' '
How so? Software from Junglee Corp. in Sunnyvale, Calif., for which Amazon is
paying $180 million, will help consumers who visit Amazon.com to comparison-shop
for everything from personal computers to perfume. PlanetAll in Cambridge, Mass.,
another of the new Amazon ventures, offers a service that currently lets some 1.5
million people keep in touch with each other online by organizing their address books
and coordinating their appointment calendars. With its already flourishing online
bookshop, these recent acquisitions will give Amazon the potential to become ''the
Wal-Mart of online,'' according to Aberdeen Group analyst Mark P. Peabody.
The moves raise the stakes for Amazon's current rivals, such as Barnes & Noble
Inc. and Borders Group Inc. And they put Amazon in more direct competition with
such darlings of the Net as Yahoo!, Excite, and America Online. All aim to make
E-commerce a central piece of their business models.
''UBER-PORTAL.'' Bezos remains coy about specific plans for Amazon' s
expansion. Recently, however, he started selling CDs and will soon move into videos.
Junglee's shopping search engine opens up the potential for Amazon to offer
products from other sites, for which it could charge a commission or advertising fees.
Bezos plans to use PlanetAll to enhance customer service, offering niceties such as
reminders to send birthday gifts to relatives.
But how far Amazon can go, and how soon, remain big questions. By evolving from
an online bookseller into an online shopping destination for all cybercruisers, Amazon
could come into conflict with sites such as Yahoo!, which it now pays to send it
traffic. And it's unclear how many merchants will be willing to sell through Amazon.
''Are they going to subjugate their brands to this uber-portal?'' asks Scott Walchek,
CEO of C2B Technologies Inc., which sells software similar to Junglee's. He says
many merchants using Junglee have called him since the Amazon deal to check out
his service.
Finally, there's a danger Amazon could lose some of the focus that has kept its sales
rocketing--up nearly fivefold, to $203 million, in the first six months of 1998. It's losing
money, $30 million so far this year, and can't afford a misstep. But Bezos insists that
''the vision has always been broader than books and music.'' Now, maybe even
broad enough to justify Amazon's name. |
