I know who Bertelsmann is... the partnership will hurt Amazon in pricing on the book front. Big deal... I go back to the "$2-$5 savings" vs. "first mover advantage."
Second, if your going to argue on the pricing front... there is already a web site (i read about it 2 weeks ago and dont have the url unfortunately) where you can price a book on any of a number of web sites.. and if your arguement is going to be "well BKS will sell books cheaper AND DESTROY AMZN!!!" then that arguement is moot because in that case, there are already apparently book sellers on the net under cutting both BKS and AMZN. What is their long term viability? I dont know.. I dont know how any of the etailors are going to do great long term with increased competition and lower and lower margins as competition increases.
As for your last sentence I agree there will be very few survivors in the end... but that doesnt mean the survivors will be in a great position either. Continuous pricing pressure on all these co's will hurt them all. Already there are "bots" by Infospace and Inktomi that will search the entire internet for the best pricing. CNET has a service for that for technology wares. So if Im looking for the lowest price I will just use one of them and find one of the cheapest bargains out there, no matter what the commodity... and I wont care if its AMZN or BKS or Egghead or whatever.
Also, many arguements here are forward looking ... not that all internet arguements aren't... but to compare BKS which once again is books... books...books... books.. to a co. already which has its business development in 5 or 6 areas is comparing apples to oranges. To say BKS WILL be in the music business, WILL be in the drug selling business, WILL be pet business, WILL be in the DVD business, WILL be in the auction business is all well and good... but until those ventures are undertaken, BKS is simply not AMZN and to compare them doesnt make sense to me. Also, every day BKS is NOT in those arenas of competition is a day they fall behind if they are to 1 day compete against AMZN in all arenas.
So give me the counterarguement.. other than "this IPO will make BKS LOTS AND LOTS of money and with all that MONEY they are going to SMUSHSSSHHH AMZN!!" My counter-arguement is AMZN has had the best form of currency for the past 2 years... a highly inflated stock price, which has allowed them to buy other companies and do stock swaps to form partnerships. So which is the greater advantage?
Don't get defensive... that wasn't my point.. and yes I do DD... I just find the arguement here similar to the one on the ATHM board, where people think if you just throw money at a problem it will kill the competitor. To think that AOL is just going to sit on their hands and let ATHM rule the internet world... that is the thinking on the ATHM board, just as it seems to be here... ATHM has a monopoly (along w/ Road Runner) and with T backing them along with TCI and they still only have 500K customers. So its not just throwing money at a problem, its execution. BKS hasnt shown it yet.
Mark |
