With this evening's announcement that Bertelsmann AG is buying a 50% stake in barnesandnoble.com for $200 million, we should see some downside pressure on AMZN IMO.
dailynews.yahoo.com
And as discussed in the irreverent style of Andrew Serwer of Fortune's "Street Life" column:
"AMAZON.COM TO TAKE A HIT?... Here's the beef:
Bertelsmann, the German media giant, is about to buy
50% of barnesandnoble.com. Remember the announcement
about barnesandnoble.com being spun off, or IPOed?
Forget it! Not going to happen now! BTW,
barnesandnoble.com lost $30 million last year. Now
Bertelsmann is putting up $200 million for a 50% stake.
Why? To go mano a mano against Amazon. In this biz,
Amazon has a 50% share; B&N's share is in the low
teens. How is Bertel going to do battle? 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. Second, they have infrastructure, like
warehouses, forklifts (love forklifts!!), mailing
centers, etc. Amazon.com has little infrastructure. So
our German friends are just amortizing their
overhead!!! My main man Marc Gunther wonders, "Isn't
this a real challenge to Amazon?" Got that right
Marco!! Watch Amazon stock tomorrow!!!!"
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