Amazon.com Inc – 17 November 1998
2
Amazon.com Inc. this morning announced that it will
begin selling videotapes and other consumer gift items
online.
The company will offer a selection of 60,000 theatrical and
general interest videos and more than 2,000 DVDs (digital
video disk). In order to compete with current Web-based
video sellers such as Reel.com, Amazon.com will offer
some of the videos at discount prices (up to 30% off). The
video store will be divided into 12 genres, including
Action & Adventure, Art House & International, Classics,
Comedy, Drama, Horror & Suspense, Music & Musicals,
and Science Fiction & Fantasy. Amazon.com's expansion
into the Web video selling was not a surprise, since it
acquired Internet Movie Database Ltd. in April. Last
summer the company also acquired a comparison-shopping
technology company to sell a wide arrange of
other products.
The gift store will feature consumer electronics, games,
toys and other items. Many of the items featured in the
new gift store will be tied to book and music titles. Unlike
Amazon's book service, which offers deep discounts on its
products, its gift store will price the gift items in the
midrange of market price. Amazon.com is introducing a
new service called Gift-Click which will allow users to
input the gift recipient's email address and Amazon.com
can take care of the rest by wrapping and mailing the item
selected. The company also introduced Gift Matcher, a
new service that will provide users with a list of suggested
gifts based on interests.
We believe that Amazon.com's expansion into Web videos
and consumer gift items only increases its exposure to low
margin commodity products. We continue to recommend
that investors exercise significant caution towards
Amazon.com shares.
[AMZN] The securities of the company are not listed but trade over-the-counter in the United States. In the US, retail sales and/or distribution of this report may be made only in states where these securities are exempt from
registration or have been qualified for sale. MLPF&S or its affiliates usually make a market in the securities of this company.
Opinion Key [X-a-b-c]: Investment Risk Rating(X): A - Low, B - Average, C - Above Average, D - High. Appreciation Potential Rating (a: Int. Term - 0-12 mo.; b: Long Term - >1 yr.): 1 - Buy, 2 - Accumulate, 3 - Neutral, 4 -Reduce,
5 - Sell, 6 - No Rating. Income Rating(c): 7 - Same/Higher, 8 - Same/Lower, 9 - No Cash Dividend.
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