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

AMZN 233.22

+1.8%

Nov 28 9:30 AM EST

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To: Glenn D. Rudolph who wrote (40388)	2/16/1999 5:19:00 PM
From: Rob S.	Read Replies (1) of 164684

"And now a word from our sponsor . . . " Huh? Now that I've got your attention here's a point I wish to make: The Internet is rapidly changing. Early companies to the starting gates, such as Yahoo! and Amazongonenutty.com have benefited from the virgin marketplace and wave of enthusiasm that has been generated by this new "media". A lot of multi-billion dollar HARD ASSET companies have treated the phenomena as a secondary concern, behind their profit generating enterprises, Y2K concerns and other matters. For AT&T, MCI/Worldcom, Time-Warner and others it has been an analysis and staging period in which they could plan their next moves. No doubt, the monumental growth of the Internet and e-commerce caught most of them at least somewhat by surprise. So what? The Internet is only a part of their world-wide corporate strategy. Take the recent events with Lycos/USA Network and today's announcement by MCI Worldcom: A few days ago the CEO of Lycos shocked many investors and ANALS by his bold move to merge with USA Network at what many thought too low of terms. He defended the action. I posted that I thought this was a good move but many ANALS thought he had sold the company short. What a difference a few days makes. Many of the same ANALS have come to realize that the move was very foresighted - merging the company at the height of Internet frenzy (give or take a few percent). The message in this merger and the announcement that MCI Worldcom will offer news and media content via the Internet should be recognized for what it is: an indication of where the industry is headed and what the new players are likely to be. Think about this: How difficult would it be for AT&T, Time-Warner or other mega asset company to develop Internet capabilities that rival Yahoo! or anyone else? No simple feat to acquire the customer base but very possible. Then think how difficult it would be for Yahoo! or Amazon to become a full-fledged media company. Could Amazon amass the production and media facilities let alone the cash flows of a Time Warner? Guess what folks - that is what it will take to be a major competitor in the 21st century. The media is merging. It won't happen overnight, not even in a year or two. But it will happen. The mega media and infrastructure companies will dominate as content becomes more important. And merely having current customers doesn't assure Amazon or Yahoo! Place in the sun. Already well-recognized brand names, such as Liz Claiborne are suing over expropriation of brand names. "Sure you can sell our products on the web but if you want to advertise our name you'll have to sign up for a contract and pay us". The shoe that has been on the foot of the early Internet rivals will slip off and onto the foot of the creators of the merchandise and media. After all they just offer a fairly generic "experience" rather than something of real substance. And you can't even count on Amazon to tell you the truth - they will sell you what people pay them to sell you. The world is a changin' and several companies stocks are going to see a more realistic valuation. That still may not happen for another year or two - a mere 30%-40% drop by this summer isn't anything and Yahoo! and Amazon are likely to be up to or surpass this high level again by this time next year.

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