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

AMZN 247.35

+0.4%

Jan 9 9:30 AM EST

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To: Brian K Crawford who wrote (45388)	3/12/1999 7:42:00 AM
From: MoonBrother	Read Replies (1) of 164684

Amazon is talking with premier land based retailer! Enjoy! ---------------------------------------------------------- 10:08am EST 11-Mar-99 DLJ Securities (Jamie Kiggen) AMZN AMAZON.COM: Amazon In Partnership Talks With Leading Land-Based Reta DLJ **** DONALDSON, LUFKIN & JENRETTE **** DLJ March 11, 1999 Jamie Kiggen (212) 892-8985 Tim Albright (212) 892-6801 Hilary Frisch (212) 892-4374 Cathy Watters (212) 892-4357 AMAZON.COM (AMZN: $137) *+ Amazon In Partnership Talks With Leading Land-Based Retailers Range: Earnings Per Share 1999 vs 1998 % Chg 9-199 Old New P/E Ratios F1Q $(0.29) vs (0.07) NM (FY:Dec.) 1999E $(0.93) $ NA F2Q (0.26) vs (0.12) NM 1998A (0.50) NA F3Q (0.21) vs (0.16) NM 1997A (0.24) NA F4Q (0.17) vs (0.14) NM Yield: % Market Cap.: $21.2 Billion 5-Yr. Growth Rate: 80% Dividend: $0 Avg. Trading Vol.(000): Book Value: $ RATING: Buy Change: None 12-Mo. Target: $190 IMPORTANT POINTS 1. Following up the DLJ Retail group's comments this morning on larger retailer discussions with Amazon about e-commerce partnerships, we expect continued positive news flow out of Amazon. The recent Dell and Drugstore.com deals have reinforced our view that Amazon is the premier e- commerce destination and smart land-based retailers are starting to figure that out as well. 2. Amazon will only partner with the highest quality land-based retailers whose customer focus is actively being ported to their Web site, and whose category is sufficiently complex and unique as to cause Amazon to make the decision that partnering is preferable to building. Amazon will look to both native Internet companies and land-based retailers as partners. 3. The Retail group views the office supply, pet supply and home improvement sectors to be likely partners with Amazon. The retailers likely to partner with Amazon are drawn to Amazon for its customer base and expertise, also for its cash. Some deals may be structured in which Amazon helps fund the build out of a land-based retailer's site, such that the retailer's earnings are unaffected. In these cases Amazon would receive a stake in the site. 4. Incremental benefits of such partnerships are as follows: the partner gets immediate Amazon-approved access to Amazon's 6.2+ million customers, which is the single largest concentration of Internet purchasers. Amazon will likely get some form of lead-based cash payment as well as a slotting fee (the company has been silent on this topic), Amazon builds out the selection and overall utility of its commerce destination, and receives co- branded marketing efforts from the land-based retailer. 5. We're aggressively reiterating our Buy rating of Amazon. We have not yet seen a full-blown launch of Amazon's commerce destination initiative, and we look for increased announcement activity leading up to a formal Amazon commerce destination launch prior to Q4. In the meantime, we believe that the March quarter will be surprisingly strong. Now is a great time to be buying AMZN.

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