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

To: Norman Klein who wrote (3827)	5/2/1998 2:41:00 PM
From: Gary Korn	Respond to of 164684

Norman, Agreed about CDNW as a short (as does Michael Murphey, noted in Barron's). Not that it impacts the near to medium term investment decision in this stock, but the advent of (1) recordable DVD and (2) greater bandwidth will have a significant impact on how music is sold: Music can be (1) purchased over the net (like books) and (2) downloaded over the net to a recordable DVD. In not too many years, that is precisely what will be happening (though perhaps the distributor will be the record company itself, or some consolidator, rather than an entity like CDNW). In any event, kiss goodbye to shipping costs. Hewlett Packard -- the big razor, I mean ink jet printer company -- has said that the same could work for books: Order them online and print them out online (and use lots of HP razor blades, I mean ink, in the process). I think, however, that this reality is considerably farther off than the music reality (except for maybe technical manuals). The material (ink and paper) costs are high, the current printers are too slow and the product just doesn't have the look and feel of a real life book. Now, music, well, a DVD looks just like a CD, and the music sounds the same. The little paper insert is just the right amount of information for printing on an inkjet. Just some idle thoughts on a Saturday afternoon. (The idea was picked up from the CUBE thread, which will be a beneficiary of on-line music delivery... I invest in CUBE, which must be a mistake since it actually makes money.) Gary Korn

To: Norman Klein who wrote (3827)	5/2/1998 3:42:00 PM
From: William T. Katz	Read Replies (2) \| Respond to of 164684

CDNow is a better short. I've just made short positions in both AMZN and CDNow, but CDNow is more overvalued. From the simple P/S, AMZN is at $94 with $87 million in last qtr revenue while CDNW is at $30 with $10 million in last qtr. The main reason any of these internet stocks are highly valued depends on the name recognition. Here, Amazon.com is known and it is not necessarily tied to just books. CDNow, on the other hand, is both more obscure and its tied to CDs. Competition, as you state, is fierce for CD sales and know CDNow must contend with K-Tel (which doesn't look too bad), Music Boulevard, Amazon.com, Borders, and lots of non-exclusive CD sellers. CDNow growth rate is simply not impressive. Even if you assume $50 million in annual revenue, CDNow is heavily overvalued. I plan on accumulating a larger CDNW short if it moves higher.