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Technology Stocks : Amazon.com, Inc. (AMZN)
AMZN 229.12-0.2%3:59 PM EST
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To: KeepItSimple who wrote (31314)12/27/1998 6:08:00 PM
From: Rob S.  Read Replies (2) of 164684
 
Thanks for driving this fact home.

Back last spring several analysts were touting that Amazon had a great "internet technology" advantage and that it would take competitors years to catch up. To people who were working in the field, that seemed pretty naive. Just nine months latter, Amazon's major competitors have every feature incorporated in their sites that Amazon supposedly had some advantage in. People, not even the rabid anals, don't talk much anymore about Amazon's "internet technology" advantage - just about the early adopter and sales momentum advantage. And even the technophiles at the Amazing one have scrapped their internal efforts to develop customer analysis and product push software and instead have purchased commercial software from an outside company. The same stuff that any company with enough bucks can implement within 2-3 months. Cheap versions are available for small to mid-sized sites.

Your connection with the use of other technologies, such as the phone, is very appropriate. At first a few adopters took advantage of it but soon every business in America was wired. And businesses quickly adjusted their sales and customer service methods to take advantage of the new-fangled telephone technology. Pretty soon it became a "must have" apparatus and not a primary reason for success or failure. In relatively a short time, all major retailers will sell products on the Internet.

There is absolutely no reason to believe that Amazon or any other Internet retailer will enjoy unusually high margins and profits. Amazon's stock price is now only justified by future sales, margins and profits that have not been able to be achieved by any retail establishment in the history of the planet. Major studies and current experience have shown that the Internet will fuel tremendous competition that will reduce margins and profits to LOWER LEVELS that
the typically low levels of other mass retailers.

Amazon is seeing the glory period of enormous growth in sales and losses. They will not see the enormous growth in margins and profits that many investors expect, IMO.
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