Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: GRANOLA who wrote (24723)	11/6/1998 12:28:00 PM
From: Rob S.	Read Replies (1) \| Respond to of 164684

"I am hoping for"? I am not an Amazon bull - I don't care which way it goes as long as I am on the right side of the trading at the moment. Yes, this is bad news for Amazon as it works against the idea that the company will somehow become highly profitable by cutting costs while continuing to grow sales at a rapid pace. Amazon has demonstrated that they can grow sales rapidly but this puts a different understanding on their ability to reduce costs and grow gross margins and net profits. Margins will become razor thin and highly integrated companies, such as B & N, will be able to reduce costs further and expand markets better than Amazon. Sure Amazon can duplicate the hundreds of millions worth of facilities and other infrastructure that has been put together by B & N. But that would come at a cost of potential future profits. It is unlikely that NZMA can easily duplicate the publishing empire of Bertelsmann or the neighborhood retail prescence of Barnes & Nobel. From the release - "We have the greatest in-stock inventory in the world," said Mr. Riggio "This acquisition enables us to deliver books faster and more cost-effectively." "For starters, . . . enable us to create a strategic business unit which will revolutionize book distribution in the next century." ". . . through Lightning Print . . blah, blah. .." B & N can quick-print stuff at 11 distribution centers, have it out to their book stores or ship it directly to on-line customers or affiliates within 24 hours. What does that mean to their business? For starters, B & N does a large portion of their business to corporate and government customers. They have EDI acounts already established. This will enable them to better transition that to the Internet and expand it greatly to become much more of an on-line warehouser of government and specialized information. They can also serve the smaller market of the on-line book buying public better. So "Where does Amazon Go Tomorrow?"