weekend reading:
techweb.com
As always (PSS) price, selection and service will be the key barometers of measurements. Unlike hightech and biotech sectors where innovation, technology leadership and time to market can give some companies extreme stock price premium, the market AMZN is in is the retail supermarket type industry. Can one imagine a supermarket that is not going to make money for the next year and does not know when it will make money and paying 180$+ for its stock price. Check what Safeway is trading at, and the PE ratio and the profit margin. AMZN is in fact just a form of supermarket on the web. On the Web without brick&mortar is in fact a big disadvantage as opposed to what many industry analysts and investors beleived. Competitions can come in and do the same thing on Web in six months compared to building stores in key places and putting in the support infrastructure. That's why it's extremely tough entry barrier when competing with Safeway in the area of having the type and number of stores and distribution network. Keep in mind that real-life touch-and-feel shopping will always be the major driving force in consumer buying for many years to come. This is in contrary to what many believed also that web-based commerce will take off like crazy. Not in the consumer area, what will realy takeoff is the business-to-business side of e-commerce. In the consumer area, a small number of low price non-breakable, non-perishable, non-rethinkable-for-return, and non-excitable-for-buying items like BOOKS may have some makret share. Even BOOKS, many buyers want to go and browse the real ones before getting the hands on some few books. So, anyway one slices and dices, why should one pay 180+ for a retail store which the future is bleak with no profit?? AIMO.
And btw, Periphonics (PERI) is one of the companies mentioned in the above article. PERI is the type of company that will in fact greatly beenfit from this Web-based commerce for business support.
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