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Technology Stocks : Jimbo's Playhouse/CPQ -- Ignore unavailable to you. Want to Upgrade?

To: Mao II who wrote (2141)	6/17/1999 7:19:00 AM
From: Kenya AA	Read Replies (1) \| Respond to of 12662

M2: Thanks! I also hold some INTC now too - volume was very impressive yesterday. I was looking at AOL too - bounced very nicely off support at 90. May pick up some more EBAY as well. K Amazon an EBay Killer? Not! by Craig Bicknell 2:15 p.m. 16.Jun.99.PDT When Amazon.com said on Wednesday that it would invest US$45 million in world-renowned auctioneer Sotheby's to create an online auction service with the 255-year-old company, the market cheered. But investors who think Amazon (AMZN) is now poised to threaten eBay (EBAY) in the potentially gigantic online auction market should think again, analysts said. Problem is, eBay has an awfully big head start. That's all that counts in this industry. As in the brick-and-mortar world, whichever bazaar has the most buyers and sellers will draw even more buyers and sellers -- no matter what kind of flashy neon detours competitors set up. "The key to the auction business is unique merchandise, and that's what eBay's got," said Mike LeConey, an analyst at Security Capital Trading. "There are things on eBay I didn't even know existed. It's the world's yard sale. Nobody has come up with a technique of competing with that that's had any success." EBay's huge array of items has drawn hordes of buyers and sellers. As more sellers post on eBay, it draws more buyers, which in turn draws more sellers. As an upstart in the business, Amazon has yet to establish that self-perpetuating cycle. And it may never happen, analysts said. The Amazon-Sotheby's partnership will bring in a big dose of collectibles like coins, stamps, art, and antiques. But while it may prove a nice source of revenue for Amazon, it won't be a catalyst for explosive growth. Amazon and Sotheby's plan to set up a joint site at sothebys.amazon.com. Only Sotheby's professionals will be able to post items for auction. No matter how successful, it won't be able to match eBay's limitless scalability (which analysts use to justify eBay's whopping market value). "The problem with these high-end auctions is that there's a finite amount of premium goods and a finite number of people who can authenticate them," said Dalton Chandler, an analyst at Needham & Company. Individual sellers will still have to post their items at Amazon's regular auction site. When it first launched its auction site last March, Amazon tried to seed the business by offering thousands of items from more than 100 merchants. But merchants don't offer the sort of quirky, one-of-a-kind items that help drive eBay's popularity, analysts said. And if buyers aren't searching Amazon for unique items, then individual sellers won't have the motivation to put items up for bid. By cross-linking, Amazon hopes to drive traffic from sothebys.amazon.com to Amazon.com auctions. Sotheby's own auction site also will funnel into Amazon's offering. "We think the three sites together will introduce a world of buyers and sellers," said Amazon spokeswoman Sharon Greenspan. It's impossible to tell how Amazon's auction site has fared in its first three months. Analysts who follow the company said it's keeping early results close to the vest. "They really don't give out a lot of information intra-quarter," said Amy Ryan, an analyst with Prudential Securities. Amazon has no intention of breaking out numbers for its auction business, even at quarter's end. "We're not and we won't," said Greenspan. "We'll give some sort of indication of how it's doing, but we won't be too specific." Without much information to go on, Amazon's long-term auction prospects are tough to call, analysts said. In its favor, more than 10 million surfers purchased books, music, and videos at Amazon. They could be turned into auction customers. Amazon's widely recognized brand will also help draw new Net users to the site. Amazon may also have a technical edge over eBay, which has suffered severe service failures. "There's no real answer yet" to whether Amazon can pull it off, said Ryan. "It's still too early in the game." But the odds are clearly in favor of the front-runner, said Needham's Chandler. "I think eBay has an awfully secure spot in that market. There seems to be a lot of excitement and buzz about the [Sotheby's] deal. I'm having trouble getting excited about it."