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Strategies & Market Trends : Waiting for the big Kahuna
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To: Andeveron who wrote (30513)10/7/1998 6:21:00 PM
From: Glenn D. Rudolph  Read Replies (2) of 94695
 
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.

Andverson,

I believe you are wrong. I wish I saw your post prior to today's market action. It would have more credence.

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...


AMZN has found that the cost of their inventory is too high through Baker and Taylor and Ingrams. They are building an inventory base and paying for distribution centers. Their business model did not work.

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.

I believe you need to to read up on the recent problems with AMZN and their change in business model.

Glenn
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