Revenues, profits etc... have no relevance. So there is no point in wasting time and energy on this discussion. Oops, why did CPQ drop from 50 to 24 ? it was because of low profits. Someday that misfortune will occur to at least some of the momentum stocks. But until that day, make hay ....
Fortunately for the net investors, it will be a long time until the value of net companies is proven or disproven. There are an awful lot of people that don't have computers (50% of U.S. households!), let alone net connections. All these people out there to log on, buy something from Amazon, get excited, buy fifty or a hundred shares (because it's going up) ... And this isn't even considering all the developing nations. The future will be vague for quite a while.
My bet is that few companies will make significant amounts of money from the internet. The producers will profit somewhat from the reduced transactions costs, but will mostly pass these savings on to the consumer. The deliverers (FDX) should profit handsomely. And the consumers will profit from being able to price shop easily and aggressively. The middlemen, such as Amazon, will forever struggle in price competition. The economy will grow more efficient, but not to the profit of the middlemen.
For now none of this matters. The future is boundless! In no time, you'll eat Yahoo breakfast cereal, wear Amazon clothes, and drive an AOL car.
- GF |
