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

To: llamaphlegm who wrote (13603)	8/15/1998 11:06:00 AM
From: Tom D	Respond to of 164685

AMZN's strategy....Who's got the customers? If you probe beneath the surface of the esmart survey, AMZN and BKS strategies become apparent. They aren't trying to be the cheapest. They are both trying to develop loyal followings through their web page design, search engine power, customer service etc. Since shopping.com is mediocre in these areas, the latter must lower their prices to attract customers. If you think AMZN is hemorrhaging cash, it must be all the worse at shopping.com. And so the war of attrition continues. My guess is that AMZN's ultimate competition may be Shopping.com. The AMZN vision may be that of sending emails to their busy overachieving wealthy customers informing them of upcoming birthdays, anniversaries etc, for their friends using data from Planetall. AMZN will also notify the potential giver of their friends' interests in books, music etc as gifts. Let Shopping.com figure out how to compete with this model! Suppose books become electronic. Suppose music is delivered via cablemodems to powerful home PC owners who burn their own CD's. Who has got the long-term customers because of searching, selection, service etc. at reasonable price? Xlibris has one small problem....No customers. They have no promotion or marketing or way for the readers to link up with the authors. Hmmmm. Lets think, now....Who do we know who has a lot of customers? <0 barriers to entry....> The barriers to entry will be: economies of scale, associated technological challenges with providing good service, and customer inertia and loyalty. Shop bots will peel off some of AMZN customers. But if AMZN has a lean operation who can compete with them for a long time--really wage the war of attrition to the bitter end? Only somebody with deeper pockets. As long as the vision of AMZN as a major ecommerce player is promising, they have the connections to raise more capital to continue the war. Maybe Xlibris could reach customers by shopbots. Then you have to wonder what fraction of AMZN customers will start at AMZN's website, use it to find what they want, and then turn around and make the actual purchase from Xlibris. Interesting. Am sure I don't have all the answers. Not certain that I know more about this stuff than you. But there is a response to many of your arguments, and I have enjoyed mulling over it. Best Regards, Tom D