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Strategies & Market Trends : Market Gems:Stocks w/Strong Earnings and High Tech. Rank -- Ignore unavailable to you. Want to Upgrade?

To: Jerry Olson who wrote (80505)	1/25/2000 8:28:00 PM
From: puborectalis	Respond to of 120523

AMZN upbeat remarks.....Amazon's investment in Drugstore.com is another example of "the gates unlocking for a flood of many more commerce partner-distribution deals in the future, thereby accelerating Amazon's path to profitability," according to analyst Jamie Kiggen of Donaldson Lufkin Jenrette who rated the stock a "top pick" with a target price of $140. Miami, FL, January 26 /SHfn/ -- Amazon.com [AMZN] , whose shares have risen up to 75 times from its adjusted offering price, is the prototype in the embryonic but explosive electronic commerce industry. Amazon's business is more than online retailing; it is a host site for e-commerce. Amazon has a Yahoo-like ability to leverage its large audience, by selling space on its page. Thus, there are higher margins and recurring revenues. The investment in Drugstore.com [DSCM] gives Amazon a foothold into the potentially multibillion-dollar online prescription business without the risk of starting from scratch. Amazon has invested in several online startups. Just last week, the company agreed to acquire 5% of the outstanding shares of the privately held Greenlight.com, an online car buying service. According to founder and Chief Executive Officer of Amazon.com, Jeff Bezos, "we expect more arrangements like this when it makes sense for customers. We're working to make Amazon.com the only place where you can find anything and everything you might want to buy online. What you are seeing today is a completely new component of that strategy." He went on to say, "Amazon chose Drugstore.com to be our first partner with this level of tight integration because they obsess over customers the way we do." Under the agreement with Drugstore.com, Amazon.com receives $105 million under a 3 year marketing agreement. Amazon.com agreed to invest $30 million in Drugstore.com, raising its stake in the company to 28%. Customers will eventually use a single shopping basket and procedure for both sites. Previously Amazon.com only carried gift certificates and had temporary links for Drugstore.com. With Greenlight.com, Amazon.com gets $85 million plus warrants to raise its stake to 30% during the next five years. In a research note, ING Barings analyst Tom Fogarty said that "through Greeenlight.com, Amazon.com gains entry into a leading online category". He continued to say that the Internet influences over 40% of car buying decisions. In 1999 an estimated $65 billion in car sales originated online. Tom Fogarty sees auto retailing as a logical addition to Amazon.com's current products and services. Not all of Amazon.com's investments are publicly traded. But that could change. With the market's enthusiasm for dotcom opportunities, it may be Amazon's plan to profit from investments in and associations with well-run tightly focused e-commerce start-ups and investors' desire to invest in them. Maybe Bezos will purchase them all. Although there is no guarantee that any of these companies will be profitable or an immediate hit, it certainly benefits Amazon's balance sheet in the meantime. Amazon.com has invested in other Internet retailers including HomeGrocer.com, Pets.com and Ashford.com [ASFD]. Goldman Sachs [GS] analyst Anthony Noto upgraded [Amazon] shares to a trading buy from a market performer.