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

To: Tom D who wrote (28175)	11/25/1998 12:22:00 PM
From: H James Morris	Respond to of 164684

TomD, do you think that Bezos had to have the keiretsu permission to align up with the enemy.

To: Tom D who wrote (28175)	11/26/1998 2:07:00 PM
From: Rob S.	Read Replies (1) \| Respond to of 164684

Barnes & Noble has the "Premier supplier" agreement to sell books on MSN but they haven't made that big of a deal about it. I talked with John Rindlaub, VP of Marketing at Barnes~.com about this and some other things: He said that Barnes~.com only contracted with Microsoft for the book business and didn't tie-up music sales. At the time the deal was made, a few months ago, Microsoft thought that CdNow! or other etailer would want this part of their ad space treatment. Amazon came on strong with music sales and was willing to pay MSN for the privalege of pitching ads to all the boob-tube netwellians. I think Barnes~.com's vision at the time of the deal was near sighted but, on the other hand, no-one really makes out that great on this deal except Microsoft. It is another license for Amazon to lose more money. What is the nature of these deals anyway? A "Premier" relationship entitles the supplier to some key tie-ins to content sites and enables them to do more directed advertising. It gives them the ability to put some cute java or ASP ads in key places and get at finer granularity of ad content once they can execute on it. But other than that, it doesn't restrict Barnes~.com or anyone else from advertising on MSN. Barnes will continue to have the agreement for the key book market while Amazon will have it for the smaller, lower margin music business. In summary, B.F.D. ----- Rindlaub said that Barnes~.com will be pressing hard with their new TV spots this Fall/Winter season. They plan to spend more than Amazon. John thinks that the web site has improved to the point that Amazon no longer has an advantage and that continued improvements to the Barnes~.com site will shift the balance toward their favor. Barnes~.com intends to overtake Amazon in on-line book sales. I think that is just "the company line" at this point and the "early adopter" momentum advantages will be much harder to defeat than the Barnes~.com's attitude implies. However, that is the right competitive attitude to have. John said that "Amazon is a bunch of technology hacks looking for products to sell". That is certainly true, but the formula has worked very well up to this point and is likely to continue to bring success in sales, if not profits. Both of these companies are racing rapidly toward the inevitable course of vertical integration from the publisher (and eventually involving more content creation) through the delivery to the end customer. At this point, Amazon has the clear advantage in on-line sales while Barnes/Ingram combined with the Bertelsmann collaboration have the clear numbers and cost structure advantage. This is just starting to shape up into a battle. Amazon has the top spot in the hearts and souls of Netwellians but competition will make profits more and more difficult, IMO.