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

To: Glenn D. Rudolph who wrote (18604)	9/27/1998 9:55:00 AM
From: llamaphlegm	Read Replies (2) \| Respond to of 164684

Glenn: interesting read. forbes.com Top 40 Entertainers Want to see how far Internet fever has gone? Compare Borders Group with Amazon.com. Borders overboard? By Thomas Jaffe BORDERS GROUP and Amazon.com both sell books. Amazon.com has a market capitalization of $6.3 billion, and projects revenues this year of $300 million. Borders Group will have nine times Amazon's sales, but has less than one-third Amazon's market capitalization. Why should one bookseller command a price/sales ratio of 21 while a bigger one has a price/sales ratio of less than 1-for-1? Dumb question. Amazon sells through the Internet, Borders through conventional stores. Ann Arbor, Mich.-based Borders did finally unveil its own Web site in May; by July its stock ran up to $41.75. But a wave of selling by disappointed investors has since knocked Borders' NYSE-listed shares down to a recent $22.13. Borders' Web site lists more than 3 million book, compact disc and video titles, but what's disappointed the market are the company's seemingly modest goals. It came to the Internet late, opening its Web site nearly a year after Barnes & Noble launched its site to compete with Amazon, and doesn't plan to vie for bookselling supremacy on the Web. It says its Web site is mostly intended to accommodate its superstore customers who want to shop on-line. Never mind that Amazon is still in the red, while Borders will earn $100 million this year, $1.22 a share, up from 98 cents last year. Sales this year will exceed $2.6 billion, a 17% increase over last year. Same-store sales are expected to post respectable 5% to 6% gains. The market seems to be saying, however, that Borders is heading for the scrap heap while Amazon owns the future. But Amazon's prosperity is on the come, while Borders' is here and now. Borders runs 225 eponymous superstores and about 900 Waldenbooks mall stores across the country. The company is so healthy that it will spend $175 million this year on opening new stores and will still generate some free cash flow. Amazon, meanwhile, is burning cash. ... While choosing not to invest heavily in it, Borders is not ignoring the Internet entirely. Leveraging its superior inventory management skills, this year Borders opened a new fulfillment center near Nashville to be used to ship orders made over the Internet and also to ship special orders to stores fast enough to match Internet speed of delivery on rarer books.