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

To: Glenn D. Rudolph who wrote (10066)	7/12/1998 1:15:00 AM
From: llamaphlegm	Read Replies (1) \| Respond to of 164684

Glenn: It was Fred Hickey, You can get the phone # from directory assistance in Nashua, NH if you want to reach him (or NPR will give it to you if you call them in DC). If you're on target with this stuff (and I believe that you are), please send it off to barron's, BW, Forbes et al ... that's fairly signigicant stuff. LP

To: Glenn D. Rudolph who wrote (10066)	7/12/1998 2:21:00 PM
From: Rob S.	Read Replies (2) \| Respond to of 164684

I don't think it was a "planned scam" from the beginning. Through one of the professional groups here in Seattle, I have met software developers who were involved with the initial site and were given copies of the business plan that helped to recruit venture capital. The company did forecast losing money but that red ink has flowed more quickly than originally was modeled. Seattle is a great place to develop software because of the large number of skilled programmers and resources. IMO, it is not the best place to establish an internet retail business because of the high costs of doing business. That high cost goes well beyond bricks and mortar or even the wage scale and options needed to attract competitive talent (Amazon is quite generous with stock options - it is stated as the preferred strategy to recruit and retain key employees rather than paying cash bonuses and higher salaries; see 10Qs, 10Ks). The use of options is so lavish that it will eat into shareholders profits in years to come; See recent Baron's and WSJ articles on the effects of the heavy use of options on earnings). The orientation of the founders was to take advantage of several innovative mechanisms of the internet in order to grow the business quickly. I think they have done an excellent job on the growth side. What they have not concentrated on and where they have critical weakness in experience and "motus operandi" is in concentrating on having a very low cost structure that matches the pricing pressures and low margins that are an inevitable outcome of doing business on the net. I think it is more "business culture ignorance" than plan that is Amazon's downfall. They are blissfully grinning about how wonderful the huge growth is and adding employees rapidly in a very tight job market - they "get the net" but don't "get the competitive environment".