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

To: Craig Richards who wrote (25164)	11/9/1998 10:55:00 AM
From: H James Morris	Respond to of 164684

In trying to keep up with TomD and family's on-line shopping habits, I'm going to buy all of you Amzn freaks a Book, Cd or tape for Xmas. < NEW YORK, Nov 6 (Reuters) - Online retailers are missing a big opportunity to target consumers who buy online for themselves but spend very little money on gifts, according to a report released this week by new media research firm Jupiter Communications. Nicole Vanderbilt, group director of the firm's digital commerce strategies practice, said a consumer survey revealed that only 16 percent of online purchases are gift-related, contrary to her expectation that purchases would be heavily gift-related. With analysts predicting that consumers will spend $2.3 billion online during the holiday season, up from $1.1 billion last year, online retailers may be missing an even bigger revenue opportunity by failing to adequately encourage existing customers to make gift purchase on their sites. Online music stores, for example, "are doing a good job of getting consumers to buy music for themselves but not music for others," Vanderbilt said. She said that while many electronic commerce sites offer gift ideas and gift-buying sections, "We think there is real opportunity to exploit things like wish lists or gift registries. Even Amazon's gift tab on the site is a disappointment. The sophistication of the recommendation is very low." Jupiter considers leading online bookstore Amazon.Com Inc. <AMZN.O> (www.amazon.com) to be a good measure of the industry's present state. According to Vanderbilt, part of the problem for retailers lies in their tracking systems, which cannot distinguish between gift and self-purchases. Scott Meland, senior vice president of Cendant Corp.<CD.N>,agreed to the difficulty of tracking the difference between gift- and self-buyers. Meland said that while the company's online discount shop, NetMarket (www.netmarket.com) has a gift area, in which it showcases gift ideas, he does not know the overall proportion of gift-buyers. "Many of the things that we sell (outside of the gift area) could be gifts that they could be giving," he said. In addition to the technical difficulty of tracking, Vanderbilt said some sites actually discourage consumers from making gift purchases. For example, if an online bookstore offers a function in which consumers receive recommendations based on the kind of books they buy, purchasing a gift could skew the entire recommendation mechanism. As a way to circumvent both challenges, Vanderbilt recommended investing in a separate site for gifts. It would be well worth the effort, she said, because it would not only increase revenue, but would provide an opportunity for retailers to retain customers and gain loyalty, a growing objective among Internet companies. "I think we're going to see just the first generation gift areas this holiday season," said Vanderbilt. "It's only the tip of the iceberg." 20:23 11-06-98 >

To: Craig Richards who wrote (25164)	11/9/1998 2:37:00 PM
From: Glenn D. Rudolph	Respond to of 164684

In the FY97 SEC report, Amazon reported $21 million spent on advertising and $39 million spent on marketing. The marketing budget includes sales fulfillment expenses of credit card fees, customer service and the salaries of fulfillment employees. I would also assume that any fees paid to associates would be included in this number, although that was not explicitly stated in the report. It is also possible that associate fees are included in the advertising money spent. Craig, Thank you for the break down. This means AMZN could not be profitable if they stopped advertising completely. Glenn