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

To: Glenn D. Rudolph who wrote (25085)	11/8/1998 3:57:00 PM
From: llamaphlegm	Respond to of 164684

washingtonpost.com Amazon claims 85 percent of online book sales. But the Internet accounts for only 3 percent of the overall book market, and Bezos sees that growing to no more than 15 percent during the next decade. In fact, he believes electronic retailers will put no bricks-and-mortar brethren out of business any time soon: "I don't believe you'll see lots of empty retail space." Predictions that the Internet will close stores remind him of how people thought television would kill the cinema. "That ignores the basic human need to congregate and to be together and to experience things in the real world," he says. Bezos pooh-poohs speculation that Amazon aspires to be a virtual Wal-Mart Stores Inc., directly selling every product imaginable, or that it hopes to be the Microsoft Corp. of online retailing. E-commerce is too big for any company to monopolize, he says. ... Nevertheless, Internet industry analysts say Amazon inevitably will broaden its merchandise. Why? Because the company remains unprofitable -- it lost $45 million in the most recent quarter -- and may have a hard time reaching profitability without new products and services. Jonathan Cohen, first vice president and chief Internet strategist for Merrill Lynch & Co., is an Amazon skeptic. He says Amazon's current valuation in the stock market -- $6.2 billion based on Friday's closing price of $124.56 1/4 -- far exceeds its profit potential and will be difficult to sustain with Amazon's current retail repertoire. "We are very close to a major competitive push by some very much larger companies," Cohen adds. "My expectation is that when those players come online, we'll see redistribution of market share." ... Kate Delhagen, director of retail research for Forrester Research Inc. in Cambridge, Mass., says Amazon appears to be executing a plan to dominate the sale of media products on the Net. She predicts that after adding a full line of videos and computer software, Amazon will go after toys and consumer electronics, categories that fit its goal of making personal shopping recommendations. "Based on people's purchasing habits with music and videos, you can absolutely map some interests in consumer electronics," Delhagen says. "And with toys, they know a lot from people's book-buying habits. They can analyze the data and figure out, do they have kids? Do they have a lot of disposable income?" A New Focus Rather than sell new products directly, Bezos says Amazon.com for now is focused on developing the comparison-shopping technology it acquired when it bought Junglee Corp. Junglee created the Web-based software that powers shopping guides for Yahoo Inc., NBC's Snap and Lycos Inc.'s HotBot. Amazon's purchase of Junglee puts those deals in jeopardy when they expire. Bezos says he's interested in developing alliances with Internet sites to help them sell merchandise, but he notes that Amazon is not in the business of licensing software. (The Washington Post Co. was an early investor in Junglee but sold its interest to Amazon.) The Junglee purchase injects Amazon into the competitive comparison-shopping arena that Microsoft entered last month when it revamped its regional Sidewalk guides, adding a national focus and a consumer buying guide. While Sidewalk will try selling advertising to earn its keep, most online shopping guides don't rely on ads alone. They charge listing fees to merchants and collect commissions when customers click through to make purchases. Bezos says he is still shaping the business model for Amazon's shopping guide. He expects it to involve revenue sharing between Amazon and the selling merchant, payment of commissions for directing customers to a particular site or some combination of the two. Amazon was one of several big Internet companies that snapped up small shopping technology firms this year. The boom in comparison-shopping sites reflects accelerating growth in Internet retailing, analysts say. Forrester Research had predicted U.S. online retail sales would total $4.8 billion this year. But it is now revising that to add several billion dollars. While that is still small potatoes in a U.S. retail economy of $1.7 trillion, profit-hungry corporations see online shopping as prime, unclaimed real estate of the future. .... and on it goes, worth the read, folks