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Technology Stocks : Amazon.com, Inc. (AMZN)

AMZN 232.41

+0.1%

9:30 AM EST

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To: Glenn D. Rudolph who wrote (32138)	1/1/1999 11:58:00 PM
From: Steve Yuan	Read Replies (1) of 164684

Glenn, At first glance, internuts indeed look very overvalued. However, if you do some calculation, the situation is actually not that bad. Consider YHOO, with 0.7 EPS, P/E ration comes at 350. But its earning growth rate is more than 100%, therefore its PEG is less than 3.5. If you look at CSCO, with P/E at 100 and earning growth rate of 25%, its PEG is 4. Similarly, you will find MSFT and DELL are not cheap at all. Furthermore, CSCO can only meet expectation while YHOO can blow away estimates. I read your notes comparing internet with railroad and radio. I honestly do not know which impact will be larger. But It is always easy to underestimate the potential of new things. The overvaluation of internuts is related to the overvaluation of the whole equity market. There is a bubble in equity market, not just in internet alone. Steve

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