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

AMZN 230.27

-0.6%

Dec 11 3:59 PM EST

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To: Skeeter Bug who wrote (16967)	9/12/1998 1:45:00 AM
From: Bill Harmond	Read Replies (3) of 164684

>>there are new players all the time. growing a 75% market share is darn near impossible in this type of business. ...but i'd bet it is declining. not that this is bad. it is to be expected in the real world. Not necessarily, and this is critical to the Amazon high-valuation rationale. If Amazon were losing share, I'd be the first to admit that the valuation premium shouldn't be there. Look at it this way: Amazon has just a 2.5% share of total US book sales. Through the principle of increasing returns, it is entirely possible to garner a larger share of the online-only business as Amazon penetrates deeper into the entire market because the online business becomes more and more efficient and therefore more competitive vs online competitors as it grows, because it leverages its brand and its infrastructure. Starbucks, McDonalds (in the 60's and 70's), and Walmart (in the late 80's) are good parallels to this concept.

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