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

AMZN 224.41

-3.6%

3:17 PM EST

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To: tonyt who wrote (33811)	1/9/1999 1:10:00 PM
From: Rob S.	Read Replies (1) of 164684

He apparently is saying both that he maintains a buy rating and that he thinks it has reached too high. His firm (OpCo) is protected. He is vague enough and public enough with his "buy" rating that it helps keep the market up while OpCo's clients can exit. One factor stimulating the Internets is a large inflow of capital into mutual funds and retirement accounts. This has reached record levels in the first few days of January - something like $9 billion positive flows in just the last week. Then there is a large amount that is flowing into individual stocks. This remains a liquidity driven market. Despite the deceleration in prices overseas, it appears that the US economy is strong enough to sustain a modest continued expansion in the economy, dispelling most of the fear of being infected from a foreign recession. The largest negative for the economic situation, IMO, is the schizophrenic nature of the stock markets: wild speculation that has propelled some stocks to never before seen valuations while some sectors remain under-valued by historical measures. Much of the rise in Internet stocks is totally justified - it is a very exciting sector of the economy and will fuel enormous changes in commerce and society over several decades. But that growing realization is fueling unheard of speculation based on extrapolated results. One of the basic fallacies is based on the crude assumption that an Amazon or a Yahoo! can "own" some portion of the Internet vehicle similar to the way Microsoft "own" a strategic position in software. That basic assumption is dope-headed garbage, IMO. The two technology markets are very different, if not directly opposed in nature: on the one hand Microsoft rose to prominence by deftly capitalizing on software standards that they created and were in stewardship over. The development of the PC industry required acceptance of defacto standards so that hardware and software could be sold to a mass market. MSDOS and then WINDOWS environments required fitting to quickly evolving hardware and manufacturers initially welcomed and then acquiesced to Microsoft's control over it. The Internet is a wide-open, standard driven environment that works on virtually any hardware platform imaginable. No company controls the basic standards and there is no need for the industry to allow any company to do so. Java or some future generation of universal software will inevitably evolve that will allow true "write once, run everywhere" functionality. That will happen because it is what is necessary at this stage of the electronics revolution to propel the industry forward and is in the best interests of the largest amount of dollars. Nowhere in the mechanics of hardware or software evolution or in the new individualistic paradigm of the Internet is there a need for or mechanism for widespread control of commerce in the hands of an Amazon or a Microsoft. The comparisons between AMZN and MSFT or DELL are warped by nearsightedness. The Internet is a great enabler of information flow and competition. The same vehicle that creates the opportunity for rapid growth will create the opportunity for rapid expansion of competition - to the extent unequalled by paltry broadcast advertising or physical comparison-shopping mechanisms in previous commerce. People will find things at better and better prices and will be able to easily compare service levels and quality.

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