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

To: Bill Harmond who wrote (24841)	11/6/1998 10:02:00 PM
From: OtherChap	Read Replies (2) \| Respond to of 164684

>It gives B&N Online a leg-up on delivery time, but also a huge >opportunity for restraint of trade. Even william is pessimistic now. He knows that Amazon's ONLY hope is for government intervention- the ingram deal would push back their fictional profit predictions at least another 10 years. Too bad the 30 day review period wont happen in time to give a decisive victory to anyone holding november puts. :) But wait, amazon isn't really going on the defensive are they?? They have nothing to fear, right?

To: Bill Harmond who wrote (24841)	11/6/1998 11:43:00 PM
From: Techie	Read Replies (3) \| Respond to of 164684

Because of the fact that AMZN is by far the dominant force on the net today I don't think they can get away with restraint of trade. But you are right in the sense that AMZN will be another Netscape :) Retail is not much different on the web than in the real world. It's price, presentation, customer service, product satisfaction etc. Except internet gets rid of distance constraints when it comes to price comparisons. Whoever can operate in the most cost effective way would eventually dominate. But even if AMZN succeed, at the end of the tunnel there is no gold and that's what the investors would come to realize. This is a low margin commodity business. I don't care what they sell, it would always be low margin. Even if they sell 10B, with a net profit margin of 1% (coming from Perkins), that amounts to ~$2 based on 48M shares. Which gives them a P/E of ~60 on that forward figure. Now you tell me when they'll get to 10B annual sales and what would their growth rate be by that time. This is my only problem with AMZN. Remember how hot EGRP was a year ago? Now everyone knows the big boys are in and it's not as easy to make money in online trading. Investors will soon catch on to the fact that business models on the net suffer the same problem. An already established large business doesn't have to spend as much on backoffice infrastructure as AMZN. I hope I don't sound too bearish :)