>> Here's the beef: Bertelsmann, the German media giant, is about to buy 50% of barnesandnoble.com. BTW, barnesandnoble.com lost $30 million last year. <<
In essence, Bertelsmann is going to buy 50% of a money losing BKS arm to compete against AMZN, a money losing bookseller on the net. Anyway you look at it, Bertelsmann loses. If anything, this will boost AMZN's stock since it affirms that the space that they own is valuable with a very big player looking to eat their lunch.
>> Well, first of all they OWN Random House, Bantam, Doubleday, and Dell--they're twice as big as the next biggest book publisher. So they OWN the books. Amazon.com doesn't own any. <<
Therein lies the advantage that AMZN continues to hold. Publishing books also come loaded with all of the trappings: stockpiles of inventory, administration, expensive deals, stock returns from vendors such as AMZN...
>> Second, they have infrastructure, like warehouses, forklifts (love forklifts!!), mailing centers, etc. Amazon.com has little infrastructure. <<
Even more competitive advantage that AMZN holds - all it requires to run the business is a couple of Cisco routers, some PCs and a domain name that spanks of internet retailing. The ball is in AMZN's field and this news will boost the stock. |
