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Technology Stocks : Amazon.com, Inc. (AMZN)
AMZN 226.19-1.8%Dec 12 9:30 AM EST
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To: H James Morris who wrote (43961)3/4/1999 9:12:00 PM
From: Glenn D. Rudolph  Read Replies (2) of 164684
 
The company sent out electronic mail messages to some of its customers yesterday,
offering them a $5 coupon that expires on March 24, in its latest effort to dump up
business. Its shares fell 3 3/8 to 120 1/8 in trading of 8.89 million.

Losses at Amazon.com, which has yet to make a profit, have increased every year since it
started selling books as it spends millions of dollars promoting its Web site and adds new
services such as selling videos. The company said in January that it plans to spend even
more this year to increase its customer base and open at least one new distribution center.

''On a short-term basis, it could be perceived as negative (because) aggressively spending
money may push out (Amazon.com's) profitability'' further out into the future, said
Ryan Jacob, portfolio manager of the Internet Fund, which owns Amazon.com shares.
''It exemplifies Amazon's belief that investing heavily today will result in a bigger payoff
in coming years.''

There is a major contradiction here. The emails with the coupon were sent to exisiting customers not new customers. The analysts are always talking about the cost of acquiring a customer but they have not discussed the cost of getting the same customer back. The problems at Amazon.com are surfacing.

Glenn
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