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

To: Glenn D. Rudolph who wrote (33896)	1/10/1999 4:09:00 AM
From: Dian	Read Replies (2) \| Respond to of 164684

<<there is absolutely no guarantee that those same customers will be repeat customers>> I agree totally with the point that each of AOL's new customers brings with him a guaranteed monthly fee, but I do think it is wrong to assume that Amazon.com cannot generate loyal customers, or consistent purchases. I first found out about Amazon.com from friends at the university here (professors). They were raving about Amazon, how they could get hard-to-find books Fed-Ex'd to their homes within 24-48 hours, how they could browse the entire "Books in Print," how they could run searches that would have taken them weeks to do manually, and how competitive the prices were. I immediately checked it out, and thought it was the greatest--I was so impressed, I immediately bought stock (my first stock purchase ever), completely unaware of what would happen, or that there was an entire trading community following AMZN's progress. I bought it because I love books, and I had never seen anything as helpful or easy to use as Amazon.com. I was a convert after the first visit. In 1998, I purchased over $7,000 in books from Amazon.com. I have friends who have spent much more than that. Among book buyers, Amazon has a very loyal following. You have to look at who the book-buying community is: Professors, students (LOTS of them use Amazon.com), doctors, etc. The question is, how large a segment of the population is this? Not very large. Add music, videos to the mix, and you get a broader spectrum of the population. I belong to several e-music groups, and many of the European members are dying to get their hands on CD's from the U.S., they used to mourn the fact they didn't have an easy way to purchase from Amazon (rate of exchange, shipping, etc.). Now that problem is solved. I don't think loyalty is the issue, Amazon can get loyalty. Amazon can get repeat shoppers, regular customers, Amazon can get global business. The issue is if Amazon can translate its machine and its technology into other areas that will generate more interest than books, and if their brand name, infra-structure, web presence and technology will continue to make it a preferred site for shoppers. Personally, I wish Amazon would take over Peapod.com and move into my area. Working 60+ hours a week, I would die to order my groceries online and have them delivered to my door in a cute little Amazon.com box. I don't know if Amazon's name and program are really a commodity that is inimitable, a commodity they can truly sell and bank on. If they become the state-of-the-art in web-marketing, and move into bigger money areas, who knows? I hope they can, and the thought is exciting. If not, it seems the stock is grossly overvalued. (But I love it anyway, at least for now!) Dian

To: Glenn D. Rudolph who wrote (33896)	1/10/1999 10:41:00 AM
From: Bullitt	Read Replies (1) \| Respond to of 164684

Glenn, Your statements on the inferiority of AMZN's business model are flawed. 1. The costs of holding inventory for amzn is substantially lower than the brick & mortar costs of operating a retail store. With automation, they can fill an order almost without human intervention. That gives them a tremendous cost advantage. 2. Since internet sales are tax free, the consumer pays about the same for a purchase at amzn as at a store and amzn should make substantially more on the transaction. 3. As bandwith increases dramatically in the next three years, the richness of shopping on-line will grow allowing people to listen to CD's, etc. I think e-tailing will take over from catalogs and start to cut into in-person shopping sustantially for certain products. You are right that the valuation of amzn stock is crazy. I'm lucky to be one that bought a bunch in Feb 98, rode it for a year and sold last Fri. But I still believe strongly in the concept of e-tailing and amzn has a wonderful brand recognition.