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

AMZN 220.66

+1.6%

Nov 21 9:30 AM EST

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To: Lizzie Tudor who wrote (35887)	1/21/1999 8:28:00 PM
From: Yikes	Read Replies (1) of 164684

There were certainly a lot of naysayers at the beginning with regards to the Dell business model. I dont think Amazon is that much different. Just one BIG difference: Dell is profitable. Dell's secret is in cutting the cost of inventory and overhead associated with building computers. The overall savings are large enough, so lower prices are passed on to the consumer while Dell still profits from the process. Amazon doesn't build anything, it's just a middle man. It can only cut distribution costs. But whatever it sells, the consumer can go directly to the supplier for lower prices on their next purchase. Without duplicate Amazon's supposely superior distribution system, someone else on the net will sell the same items for cheaper or at-cost (see OnSale and Buy.com). The fact is, Amazon is not profitable right now. And it may NEVER be profitable. The stock price didn't just get ahead of itself this month - it got ahead of itself for several months. When the dust settles, look for a price range between $20-$30 per share.

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