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

AMZN 232.12

+1.6%

3:59 PM EST

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To: Slumdog who wrote (44316)	3/7/1999 9:45:00 AM
From: Glenn D. Rudolph	Read Replies (1) of 164684

After reading yours and other posts on this thread , the view that Amazon will never turn a profit is becoming more logical and compelling than ever. IMO the tide might be on it's way out. I also read some posts on the YHOO thread discussing the "50 million" registered users. Considering an approx. 35 billion mkt. cap. this translates to over $700 per user. There are plans apparently, to begin to charge for certain info supplied by Yahoo that is presently free. Isn't one of the reasons they have so many eyeballs is that it is a free site? D, The number are worse than they even appear both for AMZN and YHOO. The 50 million registered users of YHOO may never return and that will bring the value per user even higher based on the market cap. AMZN's 6.6 cumulative customers may have made a purchase once and may never return. My wife was one of many. There is a cost to obtain a customer that the analysts use for AMZN and then the analysts pick some value of that customer through their spending over the next five years. There are two problems with this argument. One is the customer may never return and AMZN is spending money now to obtain some business from these dormant users. Secondly, the analysts use gross revenue per customer as their worth to AMZN and compare it to the cost of acquiring the customer. The net profit per customer over the expected life of the customer should be compared to the cost of acquiring and we know the net proift per customer is negative. Finally, there should be a loss of some percentage of customers via attrition. The analysts never look at the negatives. Glenn

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