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

To: jach who wrote (38440)	2/6/1999 12:30:00 PM
From: jach	Read Replies (1) \| Respond to of 164684

Valuation of Internuts is way out of whack. YHOO mkt cap is larger than CBS (the TV giant). AMZN mkt cap is close to Safeway (the super mkt giant with zillions of rev and thousands of stores) AMZN with a few hundred and a fe small warehouses selling BOOKS. When they drop it will be fast and hard. The latest and greatest bubble to pop in the 20th century.

To: jach who wrote (38440)	2/7/1999 11:05:00 AM
From: Glenn D. Rudolph	Respond to of 164684

2 [Note to readers: Back issues of The Internet Capitalist can now be viewed - and printed out for friends and family - on SG Cowen's Web site at www.sgcowen.com/rs/rs5.html. Also, we have added a profile of all Internet companies to DataBank.] The Week Internet Adolescence “The disappointment of manhood succeeds to the delusion of youth: let us hope that the heritage of old age is not despair.” - Benjamin Disraeli We had an epiphany of sorts over the last few weeks as we gazed on a bevy of important announcements in the Internet space: 3 multi-billion dollar Internet transactions, a Super Bowl flush with Internet advertisements, an Internet remark from Alan Greenspan, and a $500 million ad/commerce deal from First USA. We talk about each of this events within this issue of The Internet Capitalist, but we think the larger lesson to be gleaned here is to be reminded how far we've come in such a remarkably short time and how far we are likely to go over the next two-plus years. Last year the Street thought it revolutionary that Auto-By-Tel would spend $1.3 million on a 30 second advertising spot on the Super Bowl. This year, almost every ad had some Internet connection (URL's, etc.) and there were more than a handful of ads from pure Internet companies (our favorite was MonsterBoard's -sorry Yahoo!). Exactly two years ago Tel-Save signed a $100 million, three year ad/commerce deal with AOL. This week, AOL signed a $500 million deal with First USA. Two years ago we remember pitching an investor on the (then private) GeoCities at something like a $300 million valuation. Last week, they were bought for about $3.6 billion by Yahoo!. Such reminiscences are fun, but hardly productive to your portfolio, so how do these observations help us make money? Well, for starters, it should help keep investors focused on the big picture, a practice that is remarkably difficult in a space as hyper-kinetic as this one. We speak with some frequency when we market to buy-side institutions about the need to keep focused on the forest and not the trees. The underlying rationale is straight-forward: if we are indeed still in the second or third inning of this ball game (and we think a very strong case can be made to that end), and if the Internet's economics (e.g. increasing returns, scale advantages, business model leverage, competitive barriers) benefit leaders most, then macro Internet events should impact shareholder value more than secular, company-specific events. After all, at these valuation levels, what matters more to Amazon's stock price, a sea-change in consumer acceptance of the Web or how fast they roll out new distribution centers? We think the answer is self-evident. Once again, we find ourselves sharing the Microsoft anecdote, about the smart buy-sider who, in 1994, disbelieved our aggressive Windows 95 estimate for units shipped. Paralyzed by the debate, she ended up buying the stock at (much) higher levels only after the Windows 95 data came in strong (though there were plenty of other reasons to be owning the stock as history suggests). To this we would add about two to three conversations per day where we hear very smart investors saying “it's too late, I missed the move” or “I'll wait till it comes back aggressively.” So if keeping an eye on the big picture has any benefit at all, it is in keeping folks confident that there is still more shareholder value to be generated. After all, more market capitalization has been lost not having exposure to certain stocks than has ever been gained by ferreting out and owning “undiscovered gems” or derivative plays. The