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

To: Skeeter Bug who wrote (23990)	10/31/1998 9:21:00 AM
From: Glenn D. Rudolph	Read Replies (1) \| Respond to of 164684

Excerpts from Businessweek: "BUILDING BLOCK. Dell lets customers configure and price a computer system online. Yahoo! and AOL offer a slew of options for customizing their services. David Risher, senior vice-president for product development at Amazon, says that more than any ad or sponsorship, the Web site itself is the crucial building block for his brand. And he says that ''70% to 80% of the feeling people have about the brand is from the experience they have online at our site.'' Much of Amazon's effort at brand building is therefore focused on improving the site with frills such as one-click ordering and software-generated book recommendations." "But for most packaged-goods marketers, who have little to offer online, the trend toward rational branding poses a huge dilemma. More than half of consumers surveyed by Jupiter say they never visit a consumer-product Web site. Even the most popular ones pale in comparison to truly high-traffic locations. In May, Budweiser.com, among the top five most popular consumer-product sites, drew 180,000 visitors, according to a study by Jupiter Communications. Meanwhile, Netscape.com welcomed 10,828,000." "t's not that the packaged-goods makers haven't tried. But they are rapidly discovering that what made them powerful on the TV screen does not easily translate to the computer screen. Consider Coca-Cola Co. (KO). Recognizing its slick TV commercials wouldn't play well on the Net, Coke tried a different tactic--one that works beautifully in the real world. It acted as sponsor for entertainment. For example, the company rigged its Cherrycoke.com site as an entertainment gateway, filled with links to interesting sites around the Internet. Coke executives thought the site was fine until they realized consumers were spending an average of 90 seconds on it before moving on. That might be a long time on TV, when consumers are passively letting an ad wash over them. But for a consumer searching for something else, it's far too short to make an impact. ''We wanted to use the site to capture our consumer and provide a unique brand experience,'' says Scott Brannan, Coke's manager of interactive communications. ''But all we were getting to do was say, 'Thanks for coming.''' Now the soft-drink maker's site focuses more on promotions, which keep the Internet consumer looking at the Coke logo a little longer." "That need for real-world brand building may increase as rival Internet companies begin to fight for dominance within product categories. Just look at the bruising battle shaping up between Barnes & Noble Inc. (BKS) and Amazon. Amazon, like most of the strong Net-based brands, achieved dominance because it was first to offer a high-quality online service. That has created enormous brand equity for the bookseller--but for the first time ever, it faces a rival with an equally strong brand name and the financial wherewithal and marketing skills to match. Expect Amazon to hammer home its message of superior selection and online knowhow, while Barnes & Noble plays up its authority as the nation's No. 1 bookseller. The battle of the booksellers has already created fallout. Determined not to get caught in the same bind as Barnes & Noble, for example, Toys 'R' Us is opening a new online shopping site in time for the holidays. Does the toy giant see visions of huge online profits? Not exactly. The move is at least in part defensive, to counter branding efforts by online upstarts such as tiny eToys. ''Barnes & Noble learned it the hard way,'' says Anderson. ''If you are not online, your competition is out there alone talking to the online customers.'' That highlights another lesson for marketers. The fact that such heavyweights as Barnes & Noble and Toys 'R' Us are responding to rivals a fraction their size speaks to the leveling power of the Net. If the retailers were competing in the nonvirtual world, the smaller companies would barely register as a threat. That power, the ability to turn upstart pygmies into mighty amazons almost overnight, is what keeps marketers coming back to the Net. Will rational branding prove the best way of harnessing that power? One thing is certain: Surfing the Net, whether for fun or for business, is going to become an increasingly sponsored experience." THE FULL STORY IS HERE AND IS REALLY GOOD: businessweek.com@@tg36yGUA4R1*NAAA/premium/45/b3603145.htm