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

To: H James Morris who wrote (13586)	8/14/1998 9:11:00 PM
From: llamaphlegm	Read Replies (3) \| Respond to of 164684

hjm, glen rob et al: the first excerpt is from this week's BW -- special front cover about 21st century economy ... kindly notice that: 1. BW seems to think that amzn is a retailer, more specifically a book retailer more than it is the walmart or kmart of anything. 2. even as the second paragraph extolls the brilliance of amzn's business model (what would you expect a vc to say?), the first points out the seeds of doom for any middleman retailer. there goes business model #1 on to #2 and trying to compete with aol, xcit, seek, lcos, yhoo, msn, et al to capture referal fees for commerc. the second excerpt is from last week's issue, i don't if it was posted here or not. final thought: where do all the bulls go when the stock trends down, bateman, mark fowler, william harmond, tom d, kindly notice that the bears post through thick and thin ... you're thoughts are most interesting precisely when your position moves against, not when you're just cheerleading. lp But the next wave of Internet commerce will present as much of a threat to such middlemen as it offers opportunity for startups. After all, warns Steve Johnson, co-director of Andersen Consulting's global electronic-commerce program: ''Your competition is always going to be just a click away.'' The new wave will not just save money but create new electronic marketplaces--quickly turning business models on their heads. It's hard to find a more agile somersaulter than online bookseller Amazon.com Inc. (AMZN). Even though it's still losing money during its expansion phase, analysts say it's successfully busting the rules of bookselling. Despite offering 3 million titles, vs. 175,000 for a Barnes & Noble (BKS) superstore, Amazon carried only $17 million in inventory last quarter--2% of Barnes & Noble's. And while buyers pay Amazon instantly with their credit cards, it doesn't pay publishers for the books until about 46 days later--a tidy float that reverses the economics of physical stores. The result: $240,000 in sales per employee, vs. $100,000 at Barnes & Noble. ''Amazon isn't about technology; it's about changing the business model,'' says venture capitalist Ann Winblad of Hummer Winblad Venture Partners in San Francisco. A NEW CHAPTER FOR AMAZON.COM Business Week: August 17, 1998 Department: News: Analysis & Commentary: INTERNET Headline: A NEW CHAPTER FOR AMAZON.COM Deck: The book giant's high-tech buys could pit it against Yahoo! Byline: By Robert D. Hof in San Mateo, Calif. From the start, Jeffrey P. Bezos, founder and chief executive officer of Amazon.com Inc., wanted to do more than just run the biggest bookstore on earth--or in cyberspace. Now, it's becoming clearer how much more: On Aug. 4, Amazon.com purchased two Net startup companies for a total of $280 million that will help elevate his online store into an Internet commerce hub--like Yahoo! and other Web portals, but one aimed at shoppers, not merely fickle cybercruisers who want to hang out, browse, and chat. Says Bezos: ''Our goal is to be an E-commerce destination.' ' How so? Software from Junglee Corp. in Sunnyvale, Calif., for which Amazon is paying $180 million, will help consumers who visit Amazon.com to comparison-shop for everything from personal computers to perfume. PlanetAll in Cambridge, Mass., another of the new Amazon ventures, offers a service that currently lets some 1.5 million people keep in touch with each other online by organizing their address books and coordinating their appointment calendars. With its already flourishing online bookshop, these recent acquisitions will give Amazon the potential to become ''the Wal-Mart of online,'' according to Aberdeen Group analyst Mark P. Peabody. The moves raise the stakes for Amazon's current rivals, such as Barnes & Noble Inc. and Borders Group Inc. And they put Amazon in more direct competition with such darlings of the Net as Yahoo!, Excite, and America Online. All aim to make E-commerce a central piece of their business models. ''UBER-PORTAL.'' Bezos remains coy about specific plans for Amazon' s expansion. Recently, however, he started selling CDs and will soon move into videos. Junglee's shopping search engine opens up the potential for Amazon to offer products from other sites, for which it could charge a commission or advertising fees. Bezos plans to use PlanetAll to enhance customer service, offering niceties such as reminders to send birthday gifts to relatives. But how far Amazon can go, and how soon, remain big questions. By evolving from an online bookseller into an online shopping destination for all cybercruisers, Amazon could come into conflict with sites such as Yahoo!, which it now pays to send it traffic. And it's unclear how many merchants will be willing to sell through Amazon. ''Are they going to subjugate their brands to this uber-portal?'' asks Scott Walchek, CEO of C2B Technologies Inc., which sells software similar to Junglee's. He says many merchants using Junglee have called him since the Amazon deal to check out his service. Finally, there's a danger Amazon could lose some of the focus that has kept its sales rocketing--up nearly fivefold, to $203 million, in the first six months of 1998. It's losing money, $30 million so far this year, and can't afford a misstep. But Bezos insists that ''the vision has always been broader than books and music.'' Now, maybe even broad enough to justify Amazon's name.

To: H James Morris who wrote (13586)	8/14/1998 9:15:00 PM
From: llamaphlegm	Read Replies (2) \| Respond to of 164684

from tmf Subject: Ignore at your own risk... Number: of 6002 Author: JohnKe read profile \| no interview Date: 8/14/98 8:09 AM (ET) bol.com We all know who owns Doubleday, no? Fighting a price war aginst other retailers with higher gross margins is one thing. Being undercut by the publishers themselves is another. When will similar giants arrive in music and videos? When will automatic shopping agents be available to bring all of these "wholesellers" to one screen. Much has been made of e-commerces ability to operate cheaper due to the reduction of middleman costs. Amazon isn't cutting out the midleman, it is the middleman. The internet is cutting out the middleman! I think Amazon's recent aquisitions represent requirements for survival much moreso than a mere expansion of their vision. They are reaching... John PS Personalized shopping through a retailer. Why not through an agent that goes directly to the wholesellers? This is already on the way...

To: H James Morris who wrote (13586)	8/14/1998 9:30:00 PM
From: llamaphlegm	Respond to of 164684

other random tmf musings A review at: esmarts.com places our beloved Amazon behind both shopping.com and b&n.com. Blasphemers! The rest of the site looks interesting, too. Cheers! The site does look interesting. They review on-line purveyors of a number of things. The ratings for booksellers were: Shopping.com 7.69 B&N 7.68 Amazon 7.45 alt.bookstore 7.43 BooksServer 7.16 Books.com 6.89 Intertain.com 6.25 A1Books 5.86 Subject: My latest order Number: of 6003 Author: MikeMaguire read profile \| no interview Date: 8/14/98 12:25 PM (ET) I just received an order from AMZN. The service on the hard to find books (anyone else still read Richard Brautigan?) was excellent as usual. One glitch though... I also ordered one CD. The CD looked as if it had been stepped on by an elephant. The case was crushed and shattered. Attached to this cd by rubber band was a new jewel case and a printed note which read: "This CD's jewel case was damaged in transit from the distributor to our warehouse. Although this item is not up to the standards Amazon.com strives to meet, we didn't want to delay your order by waiting for a replacement copy. Instead, we've enclosed a new jewel case for you to use." So, while I'll stick to buying books from Amazon, I may not be as quick to buy CD's, software, etc. I too have ordered books from AMZN, and from many other websites..each bokseller offered excellent service..and one had a title which AMZN could not ship immediately..I even managed to get shipping charges a litle less than AMZN..in the end,,despite all the machinations and huge expenditures and hype hype hype at AMZN..they're still just a bookstore losing a ton on money..no way shape or form does their share price reflect that reality..but we've all heard that before... A AMZN has been the subject of several stories in a local paper, the Seattle Weekly. A recent cover story on AMZN's employment practices elicited much comment in the community. I am posting a letter from the August 13th edition of the Seattle Weekly that encapsulates the view of many locals. What follows is all quoted : "I enjoyed reading the pros and cons of your Amazon.cult cover story (7/16). Here's my two cents: Amazon's employee management practices are truly bizarre. On July 13 I began four weeks of training in its Customer Service Department. At first I liked the job. I was eager to learn and enjoyed the challenge of absorbing lots of new information. However, after one week, my quad leader informed me of her concerns: I was not answering customer e-mail fast enough, plus, I was asking too many questions. " At this job you are expected to work independently,"I was told. "Until you have proven yourself capable, no one will listen to you." Naturally, I stopped asking questions, and not surprisingly, I noticed that the rest of my training group also clammed up. The trainers seemed unfazed by our zombielike silences. They repeatedly urged us, if we had any questions, not to be afraid. During weeks two and three I managed to successfully repair my morale as I continued to learn and improve the speed and quality of my work. I was proving myself and receiving encouragement from senior co-workers. I was cutting it. Yet, on the fifth day of this month, in the last week of the training process, I was fired. The decision , the quad supervisor explained, was not based on my performance but rather on the assumption that my personality would eventually clash with the rest of my quad mates. I was too quiet, too distant, and therefore too risky. Ironically, my supervisor and I got along quite well. We seemed to have no obvious personality conflicts, although she's very high-strung and I'm more laid back. Two images of the last day remain: 1) Being told that my sentence to a customer "I hope this helps" has negative connotations. 2) Having my freshly critigued e-mail crumpled and tossed into the trash by my "mentor". Looking back, I have no choice but to laugh at Amazon's insipid employee management practices. Then again, I got out early." Jason West via e-mail"

To: H James Morris who wrote (13586)	8/14/1998 9:46:00 PM
From: llamaphlegm	Read Replies (2) \| Respond to of 164684

Wherehouses and white elephants: The first of many retail businesses is about to be Internet-ted to death By Robert X. Cringely It was just a small item on an inside page of the Wall Street Journal. Viacom, the media empire run by Sumner Redstone, was selling one of its smaller divisions. No big deal. Everyone knew Viacom had too much debt and too many business units that just weren't performing, so shedding an operation here and there made perfect sense. Yes, selling Blockbuster Music to Wherehouse Entertainment makes good sense, but not just for the reasons everybody already knows. Because of galloping technology, Viacom had to sell its CD retailer while there was still something left to sell. This is the beginning of a trend that will change an industry. Blockbuster Music is, or was, a piece of Blockbuster Entertainment, the giant video rental outfit scooped-up several years ago by Viacom for too much money. The music division was relatively new, just over 370 stores devoted to selling primarily compact discs. Now Wherehouse Entertainment, another CD retailing powerhouse, will take over Blockbuster Music in exchange for $115 million in cash. That sounds like a lot of money, but it's only a little more than $300,000 per store, probably less than the value of the leases and fixtures. Why was Viacom so eager to dump the stores that they'd do so at a loss? One reason is Amazon.com. Charged with IPO moolah and in no immediate need to show an operating profit, the Internet bookseller recently started hawking music, too. There were already some well-established Internet music stores, but Amazon.com has a certain cachet on Wall Street that sends competitors running either out of town or to the gym to bulk up. Barnes and Noble decided to bulk up. Blockbuster Music decided to run. After all, Amazon.com and its ilk can offer every CD there is with no inventory costs or shipping fees that aren't paid directly by the retail buyer. This means, even though it takes a couple days to get the music, customers can always get what they want and get it cheaper by ordering over the Internet. Retail stores can't compete. From Viacom's perspective, this is bad enough, but it's not the real reason for selling. Blockbuster Music, after all, could still claim the impulse buy, that nth copy of the White Album you need at the last minute as a gift for your cousin Bud. And in the music industry, there is a lot of impulse buying. Alas, advancing technology is taking away even that sale. We are at the dawn of the era of online music delivery, when even impulse buys will be downloaded from the Net. Who needs stores? Thanks to Moore's Law, there are two technical trends at work here -- the bandwidth gap and the processing surge. The gap is narrowing and the surge is growing. The result is that change is happening in the way intellectual property is delivered almost too quickly for outfits like Viacom to even react. As your pipe to the Internet gets fatter, the time needed to download data gets smaller. As the microprocessor and memory in your PC get more powerful, the more they can compress those files, making them download even faster. By working in two dimensions at once, we've managed to use Moore's Law to accelerate itself. It's a combination of faster push and faster pull, each doubling in performance every 18 months for an aggregate improvement of about 2.25 times per year. However fast you can download a file today, a year from today it will be at least twice as fast. And a year after that it will be five times faster, guaranteed. So anything that is pure intellectual property, that either doesn't require a physical manifestation or can be poured into some kind of generic container, will be more and more likely to arrive at our houses by wire rather than in our shopping bags or via UPS. At some point the combination of ever quicker gratification and lower price makes it less painful to download such files from the Net than drive across town to buy them. If the cost is lower and the time required is less than what it takes to drive to the mall and back, people will simply stop buying these kind of goods in stores. The record companies saw it coming more than a year ago when college students, who typically have the best Internet access of all, started trading MPEG-3 compressed audio recordings of their favorite bands. Suddenly it was like the whole music industry being treated like the Grateful Dead with bootleg recordings, only these recordings are digital and can be copied over and over without a decrease in quality. Drawing the curves, it looks like the date at which it will be just as easy to download a CD worth of music from the Internet as it is to bring it home from the mall is no more than a year away. This week's deal between Real Networks and Inktomi to provide a scalable infrastructure for such downloads guarantees that. This is a trend that won't stop until it has run through every kind of intellectual property that millions of people want capable of being sucked through a wire. The businesses that will be affected first are those whose intellectual property makes the smallest files. That means music, because audio files are typically a tenth the size of video files, making it still more efficient to drive to Blockbuster Video (not Music) for that copy of "Passenger 57" than to download it from the Net. The bitrate of transferring data on videotape by car is still significantly greater than schlepping it over the Internet. for now. How long will it be before the time difference between driving to get video on demand or downloading from the Net is a wash? Three years, according to my figures. Add another three years for broad availability and to cover the impact of HDTV, which will make our video files five times larger again. In six years, then, the Blockbuster and Hollywood Videos of this country will probably be have sold their storefronts, too, leaving the strip malls of America to Starbucks and Bennetton. These intellectual property businesses will simply go away, along with what's left of the retail software business. All that will be left is books -- the oldest intellectual property vessels of all. Fortunately for the Viacoms of the world, six years is a business lifetime away. In this era where businesses concentrate almost exclusively on short term results, hardly ever looking past the present quarter and the present fiscal year, the prospect of having a multi-billion-dollar business simply evaporate in six years is not at all daunting to Viacom and its competitors. They haven't thought that far ahead and probably won't for sometime. But eventually they will. By then, Sumner Redstone will be retired and Wayne Huizinga, the guy who sold Blockbuster Video to Viacom in the first place, will still be happily running his present business, Republic Industries, which sells cars. There's no way to stuff a car down a wire. At least, not yet. pbs.org

To: H James Morris who wrote (13586)	8/15/1998 10:01:00 AM
From: Glenn D. Rudolph	Read Replies (3) \| Respond to of 164684

Glen<It was very nice too:-)> Have a nice weekend. Do you think that the sellers (controllers) are, finally starting to leave? Call Morgan Stanely, DJL, etc and find out. Don't call Datek though, their calls are being monitored, by the SEC. Trust me. H, James, I have no idea what the controllers are doing. I really doubt they will tell me either:-) There are shares to short everywhere. I can find them at three brokerage houses out of three brokerage houses but do not need more shares. Datek appears to be in real trouble from what I have read but I still know very little about them. The Robertson Stephenson internet report this week was interesting. They seemd a bit confused about AMZN like they were guessing a lot. They were not willing to state they were wrong as far as the business model goes. Time will tell. Glenn

To: H James Morris who wrote (13586)	8/15/1998 5:23:00 PM
From: Glenn D. Rudolph	Respond to of 164684

The old shipping charges booked as revenue: Net sales are composed of the selling price of books, music and other merchandise sold by the Company, net of returns, as well as outbound shipping and handling charges. Growth in net sales reflects a significant increase in units sold due to the growth of the Company's customer base and repeat purchases from the Company's existing customers and, to a smaller extent, increased sales of music following the opening of the Company's music store in June 1998 and the inclusion of sales from the companies acquired in April 1998. This increase was partially offset by a decrease in prices effected in June 1997. International sales represented 22% and 28% of net sales for the quarters ended June 30, 1998 and 1997, respectively, and 21% and 28% of net sales for the six months ended June 30, 1998 and 1997, respectively.