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

To: Tom Hua who wrote (30581)	12/20/1998 9:38:00 PM
From: Glenn D. Rudolph	Respond to of 164684

The Internet Capitalist SG Cowen Internet Research 5 at The Capitalist; in this business you're either growing or shrinking. We're just hoping to keep you invested in those that are growing. Trend Watch Why Changing Consumer Behavior Is Key We often find ourselves repeating a mantra of sorts about consumers; that if you have a product of service that can entice consumers to change the way they spend either their time or their money, then you're likely to create some substantial value with that product or service in time. Bob Pittman, AOL's President and COO, likes to repeat the statistic with some frequency that, for the first time ever, television viewership has declined recently (this actually happened some quarters ago, so don't fret if you've missed it), which, quite reasonably, he suggests is from the advent of Internet online services like AOL. The reason this is important, of course, is that AOL is able to capture much of the value associated with these consumers' time (by marketing to them and selling them things), and if more of that time if shifting toward the Web and away from TV, then there must be some extremely compelling reasons. Which brings us inevitably, to Amazon, and a personal anecdote we think is telling. SG Cowen has an institutional salesman (woman, actually) that has always been a mild user of the Internet; your typical light consumer/user of the medium, neither bleeding edge nor Luddite. Her online behavior rarely tended beyond using the Web for more than news, weather, sports, and the like. After completing her first real transaction (on Amazon) on the Web sometime about 6 months ago, this woman has not been to a single brick and mortar retail store yet for her holiday shopping. Not one. Zero. The anecdote is strikingly familiar to many of us by now, since the news media has been bloviating for some time with similar tales of e-Christmas mirth. But from our perspective, we think this is particularly valuable thanks to what it says about the Internet's ability to change behaviors, and change them radically, not only on the media side (a la TV viewership), but also on the commerce side. Think about the enormity of this behavioral shift; this woman is giving up 30+ years of behavior (of shopping in retail stores during the holidays) in 6 months time. She has gone from not shopping on the Internet to completing almost the entirety of her holiday retailing online (we'll wait anxiously to see if this behavior remains throughout the year). And just like AOL is able to capture the bulk of the value associated with shifts in behavior with respect to how consumers spend their time, Amazon.com is able to capture the bulk of the value associated with how consumers spend that other important element; their money. As we state in our “Internet Capitalist manifesto”, our goal with this newsletter is to identify and profit from the dislocations that the Internet has created for businesses and consumers alike. Don't underestimate just how big a dislocation we're witnessing here, even though that's sometimes easy to do. Online Shoppers: Who The Heck Are They? As we approach the critical last shopping week before Christmas, we thought it might be a good idea to take a step back and try to determine the who and why behind those e-Christmas expectations. This week, findings from the Wharton Virtual Test Market (WVTM), a panel of over 10,000 Internet users, were released. Much like the AOL/Roper Starch findings we discussed in the last Internet Capitalist (12/4/98), the study