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

To: GST who wrote (101089)	4/15/2000 9:06:00 PM
From: 10K a day	Read Replies (3) \| Respond to of 164684

I just want to go to Hawaii! I owe you lunch! LOL!

To: GST who wrote (101089)	4/16/2000 6:06:00 PM
From: Glenn D. Rudolph	Respond to of 164684

Why Wal-Mart Is Scared of Amazon.com By Laura Rich On a symbolic level, the lawsuit filed by Wal-Mart against Amazon.com on Oct. 16 could hardly be more delicious: The nation's largest retailer, itself a relatively young company that succeeded by breaking all the rules, goes after an Internet upstart that aspires to be something of a "Wal-Mart of the Web." But the specifics of the case are more than a little interesting. Wal-Mart alleges that Amazon. com is essentially trying to steal its Retail Link computer system by systematically recruiting people from its information services division. Retail Link is one of the secrets of Wal-Mart's extraordinary success. It's lured vendors and suppliers into happily stocking Wal-Mart's shelves, and allowed it to swiftly knock competitors out of the market. The big draw is in Retail Link's ability to give vendors Web-based access to information on who's buying what from which store at what hour, all in real time. And Retail Link instantly segments that data to suit the vendors' interests. Wal-Mart is afraid that knowledge of the system ? held by Richard Dalzell and Jimmy Wright, both former Wal-Mart execs now working at Amazon. com ? could be used to give the bookseller a much better way to handle inventory than it's doing now. Amazon.com has already managed to set up a strong information management system on the front-end, focusing on customer service and capturing data on its members. But it's been widely criticized for its inefficient inventory management. If Amazon.com intends to grow beyond the business of selling books and music, which most observers believe it does, it has to get its backend systems in order. "Amazon realizes that cost is out of control," says Kate Delhagen, director of the retail group at Forrester Research in Cambridge, Mass. Wal-Mart acknowledges Amazon. com as a competitor ? and Retail Link is one tool that could help it fend off the upstart. "If someone's building an engine from scratch for 20 years, it's not fair to lift that engine and put it in [another frame]," says a Wal-Mart spokesperson. The other curious fact of the suit is that Wal-Mart named Drugstore.com ? a new online commerce start-up that has yet to launch ? as a defendant, as well as uber-VC John Doerr and his firm Kleiner Perkins Caufield and Byers, which backed Amazon.com and is now backing Drugstore.com. Are Amazon.com and Drugstore.com in cahoots? Although both Amazon.com and Drugstore refuse to comment, sources close to Amazon.com, Drugstore.com and Kleiner indicate a grand plan, which includes a significant plot of real estate for Drugstore.com on Amazon.com's front page. This would give a no-name start-up instant access to people comfortable with online shopping. Peter Neupert, the former Microsoft exec who runs Drugstore.com, denies knowledge of Wal-Mart's inventory management systems. He also says there's no validity to Wal-Mart's claim that Drugstore.com was part of a plot to intentionally woo away Wal-Mart staff with the intent to duplicate the inventory management system with vendors. "I haven't studied the Wal-Mart model at all," he says, "but speaking in the abstract, the kind of distribution system they're putting together with a large number of stores is different from ours. I don't really know what they hope to do except to slow us down." If Amazon.com has Wal-Mart spooked, or "scared senseless" as Delhagen sees it, it's probably because the company believes Amazon.com and the Kleiner group of companies will apply that final piece of the technology puzzle to a broad array of goods, which it can provide without the high overhead of Wal-Mart's bricks-and-mortar branch structure. Michael Parekh, Internet analyst at Goldman Sachs, sees the suit as a parallel to what happened in the telecommunications industry a few years ago, when ISPs began to move into the business. "As the Internet becomes used by more consumers, it affects whole industries ? retail being one of them. Every incumbent in every industry is going to have to figure out how to deal with it," says Parekh. In the meantime, Wal-Mart's e-commerce site features many products sold in Wal-Mart stores. It also sells a lot of books. And a note on Wal-Mart's home page points out that, unlike Amazon. com, it ships its books for free.