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To: Eric Wells who wrote (69362)	7/24/1999 4:27:00 PM
From: Glenn D. Rudolph	Read Replies (2) \| Respond to of 164684

nypostonline.com AMAZON EXPLORES CONCRETE JUNGLE By EVELYN NUSSENBAUM Jeff Bezos may be leading Amazon.com offline. The giant e-tailer has approached at least one land-based store about a partnership, according to a published report. And some analysts think the idea makes perfect sense. Amazon.com is looking for an in-store presence, as small as a kiosk, so customers can pick up and return items - although it has been rebuffed so far, says TheStreet.com. Amazon.com refused comment. A spokesman said, "As a policy, we do not confirm what we may or may not do in the future, and do not comment on rumor or speculation." Whether the company sells online or off, the selling Amazon.com may need to focus on now is in the stock market. Amazon.com fell 181/4 to 1073/16 yesterday, the first chance investors had to react to the news of its $138 million second-quarter loss. Amazon.com has fallen nearly 50 percent since mid-April, when it was trading at $210 a share. "I think by next year, Amazon.com will have some kind of store-based presence," said David Cooperstein, an analyst at Forrester Research. "Online sales will be just 6 percent of the economy by 2003, so if they want to make money they're going to have to sell in more places." E-commerce watchers say Wal-Mart, B.J.'s Wholesale Club, and Starbucks might be willing to give Amazon.com some space. Wal-Mart and BJ's refused to comment, and Starbucks did not return calls. Cooperstein and others say that Amazon.com would benefit from some kind of retail space, because it is starting to sell products that customers will want to touch and try before buying. The company is now selling sports gear and apparel, items that are more commonly bought in stores. And some analysts say Amazon.com is already behaving a lot like a traditional store. "They're a brick-and-mortar operation already," says Rick Berry, an analyst at J.P. Turner and Company. "They're buying up warehouses around the country." If Amazon.com is indeed thinking of expanding offline, it won't be the first Internet retailer to do so. Laura Moore, a spokesperson for Tandy Corp., says several e-tailers have called Tandy. "We have had talks with folks who are interested in using us for fulfillment," Moore said.

To: Eric Wells who wrote (69362)	7/24/1999 4:36:00 PM
From: Eric Wells	Respond to of 164684

The Economist: How Real is the New Economy? Interesting article from this week's Economist: economist.com In summary, the article states that a professor from Northwestern University by the name of Robert Gordon has broken out the latest statistics that have indicated an increase in productivity in the non-farm sector in the US over the past four years. Gordon discovered that the increase was largely due to a massive increase in productivity in one area - computer manufacturing (which accounts for about 1% of the economy). And according to Gordon, productivity in the rest of the economy has not grown at a pace that is any different from what has been seen in the last 3 decades. What does this mean? Well, I see it as possibly meaning two different things: 1. Areas outside of computer manufacturing have a slower rate of adoption of technology and have not yet caught up - but will do so soon. 2. Recent assumptions about overall increases in productivity due to technology are not entirely correct - and this could have ramifications on views of future US economic growth and inflation. Here is an excerpt from the article stating Gordon's conclusions: "Mr Gordon sums it up this way: 'the productivity performance of the manufacturing sector of the United States economy since 1995 has been abysmal rather than admirable. Not only has productivity growth in non-durable manufacturing decelerated in 1995-99 compared to 1972-95, but productivity growth in durable manufacturing stripped of computers has decelerated even more.' The new productivity numbers, far from settling the debate in favour of the new-economy optimists, seem thus to point the other way. And if the productivity miracle is so narrowly confined, its sustainability must be in doubt. To date, the IT revolution would appear to boil down to this: computer technology has proved unbelievably effective at reproducing itself; beyond that, its apparent influence on productivity (in manufacturing, at any rate) has so far been somewhere between imperceptible and adverse." The article concludes with the following: "Even if, to take the worst case, the increase in the growth of productivity is largely confined to computer-manufacturing, it is not to be sneezed at. The increase in quality-adjusted output of PCs is so vast in relation to the inputs used that it has perceptibly lifted the whole-economy figures for productivity and GDP. Mr Gordon happily concedes that the underlying rate of growth in American GDP has improved from a rate of between 2% and 2.5% to a rate of between 2.5% and 3%. If that could be sustained, such is the power of compounding, it would transform America's prospects. To take just one example, it would maintain the “solvency” of America's Social Security system, on unchanged policies, for many more decades yet and maybe even into the 22nd century. The question, however, is whether it can be sustained. This seems likely only if big productivity improvements begin to migrate from the centre of the high-tech industry to the rest of the economy. In services, this may be happening already and the figures may simply fail to show it. In manufacturing as a whole, contrary to the evidence about particular firms, it does not yet appear to be happening. If pressed, one can think of reasons for this. Maybe the first 15 years of PC development were a bit of a let-down in productivity terms: firms spent a fortune on them and, for one reason or another, reaped comparatively few gains in efficiency. In future, things look brighter: the technology is maturing, spinning off new industries faster than during its adolescence (and thereby repeating a pattern that is familiar in the history of technology). And now there is the Internet, which as a strong force is much less than 15 years old. All these are grounds for optimism, to be sure. The fact remains, the issue is not yet settled." -Eric