To: H James Morris who wrote (121006 ) 3/20/2001 6:07:41 PM From: Glenn D. Rudolph Respond to of 164684 and consumer electronics retailer Best Buy (BBY:NYSE - news) are in "senior-level" discussions over the formation of a strategic alliance, according to one person familiar with the talks. Who is this person? <BG>They said it appeared to offer few benefits to Wal-Mart. However, an Amazon-Best Buy alliance would make sense for both, says Steve Zrike, an analyst at Forrester Research Benefits to both??? I see almost every benefit to Amazon and one very tine one to Best Buy so I don't buy it: 1. Good for Amazon: "Zrike says an alliance between Seattle-based Amazon and an established bricks-and-mortar company would likely be a boon for the online giant. "In terms of having their name out there in front of consumers, that is key," Zrike says. For example, if a deal included a presence for Amazon in Best Buy stores it could help build Amazon's brand and lower its customer acquisition costs, one of its highest expenses. " 2. Good for Amazon: "A deal with Best Buy also could allow Amazon to capitalize on Best Buy's relationships with manufacturers, says Zrike, allowing the e-tailer to purchase products at lower costs. One of the key questions surrounding Amazon's consumer electronics business has been whether the company buys goods from wholesalers at a low enough price to earn a profit. " 3. Good for Best Buy: "Best Buy, in turn, would capitalize on Amazon's expertise in running e-commerce Web sites. "It is not their core competency, and it is for Amazon," Zrike says. " So Best Buy can run an e-commerce site but it is not their core compentency. Amazon can't inventory, by or market electronics well and Amazon has no presence int he real retailing world. I would say this is very one sided. Therefore, very unlikely.