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Technology Stocks : Amazon.com, Inc. (AMZN) -- Ignore unavailable to you. Want to Upgrade?

To: dbblg who wrote (92211)	1/26/2000 3:56:00 AM
From: brian z	Read Replies (1) \| Respond to of 164684

Amazon.com Inc. (NASDAQ: AMZN) Amazon Becomes e-Pothecary, Analyst Rates "Top Pick," Target $140 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. Amazon.com (NASDAQ: 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 (NASDAQ: 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 (NASDAQ: ASFD). Goldman Sachs (NYSE: GS) analyst Anthony Noto upgraded [Amazon] shares to a trading buy from a market performer.

To: dbblg who wrote (92211)	1/26/2000 7:49:00 AM
From: Robert Rose	Respond to of 164684

That is absurd!!! Well, at least in this system we become aware of it and have some means by which to quantify its impact. Ah, the sheer magnitude and power of this Internet tsunami of $$$.

To: dbblg who wrote (92211)	1/26/2000 10:46:00 AM
From: H James Morris	Read Replies (2) \| Respond to of 164684

Lets bring the whole article in instead of what you just want us to see. >By ELIZABETH MACDONALD Staff Reporter of THE WALL STREET JOURNAL In a move expected to cheer Web advertisers, U.S. accounting rule makers left virtually untouched a standard that lets companies book revenue from advertising barter transactions, a popular practice with Internet businesses. But the rule making panel at the Financial Accounting Standards Board inserted a big wrinkle intended to end an accounting abuse in which cash-strapped Internet companies "gross up," or increase, the revenue they earn from these deals, an abuse the Securities and Exchange Commission wanted stopped. Tax-Free Web-Ad Swaps Allowed (Jan. 6) A growing number of dot-com companies now routinely swap advertising with other Web sites, in which they advertise each other's companies on their Web sites. To book these advertising barter transactions, the e-businesses then typically record offsetting revenue and expense amounts for these exchanges. Given that Internet companies are now routinely valued on their revenues -- since most of them generate losses -- regulators have grown worried that some companies have overstated the revenue received in these deals, in order to pump up their stocks. One Big Caveat Specifically, the accounting rule makers said companies can continue to book revenue they receive from bartered advertising, with one big caveat. The FASB panel, the emerging issues task force, says companies can only include revenue from advertising barter transactions so long as they have a history of receiving cash for "similar advertising transactions," and those deals didn't take place more than six months prior to when the barter actually occurred, says Tim Lucas, a research director at the FASB. "That could stop the practice of grossing up revenue, since companies will now have to shell out cash in order for these revenue amounts to pass muster," says Robert Willens, a managing director at Lehman Brothers Inc. And if the abuse was curbed, says Henry Blodget, a senior Internet analyst at Merrill Lynch & Co., it "would certainly change the valuations for some companies considerably." SEC Chief Accountant Lynn Turner applauded the changes, noting that they "should certainly enhance the information that investors are going to be receiving on these advertising barter transactions." The FASB now wants the barter amounts disclosed in a footnote, something companies now don't routinely do. Barter Transactions For instance, VerticalNet Inc., a Horsham, Pa., operator of online business-to-business trading communities, said barter transactions "accounted for approximately 21% of total revenues" in its 1999 third quarter. SportsLine USA Inc., a sports-related Internet site, said barter transactions came to about 18% of total revenue for the third quarter of 1999. James Marks, an e-commerce analyst at Credit Suisse First Boston, says his research so far shows about a dozen publicly traded Internet companies had booked revenue for these deals, with some amounts reaching 20% of the total. While Mr. Lucas says the changes could affect most media companies, some analysts say many don't have to worry. For example, CBS Corp. last year agreed to furnish Medscape Inc., a New York health Web site company, with $150 million in promotional services, including plugs on its TV and radio stations, in exchange for a 35% stake in the new company. "We have 14 of these kinds of promotion for equity swap arrangements," says Dana McClintock, a CBS spokesman. Mr. Willens says "television networks like CBS who do these transactions likely won't run into any problems with the accounting changes because they have a history of selling advertising for cash, plus the equity stakes they get are easily valued." He adds though that it won't be smooth sailing for Internet companies, "given that they have a spotty history of receiving cash in these deals, due to the newness of the industry." Lise Buyer, an Internet analyst at Credit Suisse First Boston in Palo Alto, Calif., says "the specter of these changes" has caused many companies to not include these barter transactions in revenue at all. "Companies are now erring on the side of caution," she says. Write to Elizabeth MacDonald at elizabeth.macdonald@wsj.com