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

To: llamaphlegm who wrote (32767)	1/6/1999 11:49:00 AM
From: Rob S.	Read Replies (1) \| Respond to of 164684

I'm not snorting helium - the market is ; -)! Sort of in-line with your post about competition not sitting by idly, an article in Information Week magazine titled "E-Business Work Start" - " Setting Up a Web Commerce Site or Intranet Was Just Beginning: Now Comes the Heavy Lifting." The results of surveys of corporate CIFs and MIS department managers showed that the largest categories of spending were for Y2K remediation and testing. "Indeed, only 9% of the average IT budget is slated for E-business or Intranet projects in 1999, according to an Information Week Research survey of 300 IT executives. Only 7% of respondents rate E-commerce software as their single most strategic investment this year, well behind the big two: Y2K conversion and testing (19%) and enterprise resource planning and implementation (11%). The article goes on to point out that E-commerce spending is planned for after the Y2K issue is resolved late this year and next: "After year 2000 gets solved, this is going to take off like a rocket," says Cathy Hotka, VP or IT for the National Retail Federation . . . . "E-business is expected to be a major focus at next month's meeting of the NRF's IT council. A group of IT executives form 40 of the largest retailers. "I'll be surprised if that doesn't result in a major industry effort to standardize . . . What level of resources devoted (to E-commerce) will depend on the unpredictable factors of Y2K, but the amount of energy and money is going to be huge." In summary, the boards of the major retailers have taken notice of the still infant e-tail phenomena but their IT departments have told them "First things first - we need to clean up the Y2K problem and put in the biz-to-biz infrastructure to handle E-business. Once that's out of the way, we can move aggressively on the Internet." The competition Amazon and others have seen so far has been only a dribble compared to what is about to break loose toward the end of this year and into the next century. Amazon should be given credit for "buying brand recognition" at the time when the major corporations have other issues to deal with. When the floodgate gets lifted and the focus of spending and talent shifts to E-commerce, the competitive landscape will change to the worse. During the previous conference call, Amazon said that they expected margins to remain flat for this quarter. Now Covey says that margins have eroded because of aggressive pricing. Where is the upside in earnings that analysts have been expecting? What happens when competition really heats up when the "big boys" throw their marketing muscle and money into the fray? Amazon will go on to sell lots of stuff - lots and lots of stuff - but the profits that Amazongonenutty.com speculators imagine will never be there, IMO.