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

To: Impristine who wrote (37706)	1/30/1999 12:38:00 PM
From: llamaphlegm	Read Replies (1) \| Respond to of 164684

roy -- you're right Portfolio \| San Francisco Index \| Silicon Valley Index \| Market Data Virtual Retailer Amazon.com Plans to Expand Its Real Estate Holdings Also, Thom Weisel advises Yahoo on GeoCities buyout MARK VEVERKA Friday, January 29, 1999 It's a good thing that Amazon.com isn't burdened by all that brick and mortar. Because if one didn't know better, it would appear that the online bookseller is poised to take on Walter Shorenstein. One of the key advantages that Amazon fans like to incessantly recite is that the online bookseller doesn't own stores; therefore, it isn't weighed down by real estate liabilities like rivals Borders Books and Barnes and Noble. Yet according to federal documents filed earlier this week, the virtual retailer is preparing to employ some masons of its own. In the company's 8-K financial filing, chief executive Jeff Bezos noted that Amazon's holiday performance ''was so strong, the company has committed to a major expansion plan.'' ''In 1999, we intend to build out a significant distribution infrastructure. We must ensure that we can support all the sales that customers demand, with speedy access to a deep product inventory,'' he stated. Fire up the wheel-loaders. It sounds like Amazon is going to prime the economy with construction jobs. In addition to announcing plans to expand warehouse and shipping capacity, Bezos hinted that Amazon will join its portal compatriots in their current acquisition binge. (See story by Chronicle reporter Jon Swartz on Yahoo's $4.6 billion deal to buy GeoCities Inc.) ''In 1999, we expect to invest even more aggressively than in the past,'' Bezos stated in the filing. (Read: We're shopping for buyouts.) Of course, Amazon needs to expand its distribution capability in order to keep pace with its growth. Thus far, its business model depends on high-volume sales of commodity merchandise at relatively slim profit margins, which means that the company needs the wherewithal to fill orders and ship merchandise. The filing doesn't imply that Amazon is getting into storefront retailing, which is where its traditional competitors rack up costly real estate expenses. Still, with expansion comes considerable risk -- for both the company and its shareholders. Naturally, Amazon should be able to leverage its rich market capitalization of $19.45 billion to help pay for its building spree. In fact, Amazon announced yesterday that it has raised $1.25 billion via a convertible debt offering lead-managed by Morgan Stanley Dean Witter. It isn't clear whether money from the offering --which is being called the biggest convertible deal in U.S. history --will be used, at least in part, for real estate. Telephone calls to Amazon were not returned. Despite being flush with cash, Amazon's decision to borrow more than a billion bucks suggests that it is making no small plans. In addition to CEO Bezos' statement in the filing, there are other signs that Amazon soon may be on the hook for more real estate expense than most any other Internet portal in cyberspace -- an intriguing prospect, given that Amazon last year lost four times as much money as it did during the previous year. Amazon's real estate needs are industrial and, perhaps, office in nature. Yet judging by the company's ambitious plans to build an internal real estate department, we're not talking about simply a single warehouse shed situated in fly-over country. (The company revealed in the filing that it already has begun leasing a new distribution center in Fernley, Nev.) According to Amazon's employment notice posted on its Web site, the e-tailer is looking to fill at least three key real estate positions. The site states that Amazon's real estate department is looking for a project manager for ''the planning, design, construction, and engineering of new and existing office facilities and distribution and data centers.'' The company also is looking for a real estate broker or developer, who will report to the manager of ''global real estate.'' The candidate would be expected to ''drive delivery of new facilities through the development process.'' And the third job posting is for a real estate analyst who would guide the company's ''rapidly expanding facilities needs.'' Heck, ''global real estate''? That sounds more like an empire-building arm of General Motors than a nimble division of a lean-and-mean e-commerce concern.