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

To: Mark Fowler who wrote (4510)	5/19/1998 5:10:00 PM
From: Oeconomicus	Read Replies (2) \| Respond to of 164684

With a viable business model... Mark, part of any viable business model is an ability to demonstrate how and when the business will generate a return on invested capital. Another component is an analysis of the risks, including the threat that competitive pressures may squeeze margins and raise the revenue hurdle and extend the time required for reaching profitability. Considering the way companies spoon feed analysts these days with assumptions to use in their P&L models, the fact that everyone is saying "don't focus on profits" rather than "we anticipated stiff competition and, though breakeven is higher than originally planned, revenues are ahead of plan so all is well" should worry you. My guess is that competition is stiffer and margins thinner than they originally thought possible and they are struggling to come up with a new "business model" that will get them to profitability before they run out of money. Of course, while they try to make it work, why not go ahead and borrow piles of cash to buy more time to find the answer. After all, it's not real success, but rather the appearance of success that matters in this market. Bob

To: Mark Fowler who wrote (4510)	5/19/1998 5:29:00 PM
From: Glenn D. Rudolph	Read Replies (2) \| Respond to of 164684

With a viable business model the business plan has work so far, but with price wars coming and Amazon already dropping prices, margins may or will suffer and profitability may be hard to achieve. I suppose I find the business model elusive. In my view i find this innovative that Amzn is an almost completely virtual operation. They have no stores and minimal inventory, which keeps overhead very low. Actually, overhead is high. They do not have the traffic from walk by and drive past traffic which generates business without large advertising expenses. Glenn