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

To: Curlton Latts who wrote (40140)	2/15/1999 10:39:00 AM
From: H James Morris	Respond to of 164684

>> The mania comes in when the capital markets are willing to overlook this basic principal<< Good post. I'm thinking that Bezos will be replaced eventually by his CFO, Ms Covey. The mother of EBITA.(hehe). Actually it would be difficult to get rid of Bezos, since he owns so much stock. If he hasn't turned some profits by 2003,4 or 5. His junk bond holders could turn up the heat, but by then no one will care. There will be a new fad and everyone will chasing that one. The new fad will not be books. Bezos is already trying to get out of that one. Trust Bezos on that.

To: Curlton Latts who wrote (40140)	2/15/1999 12:48:00 PM
From: Rob S.	Read Replies (1) \| Respond to of 164684

Amazon's business plan is to buy into the market in hopes of building brand loyalty that can be translated into profits at some point in the future. It is not so simple as trading $20 for $19 (or actually more like $20 for $18). One could argue that they are spending part of the money for long-term agreements that will position themselves ahead of competitors. You can also say that they are building the infra-structure and volumes of business that should result in lower operating costs, a volume purchasing position and other economies of scale - it doesn't matter how many people visit a web page or read a revue: you only have to pay to author the page once and get the book into the system. There is logic to this strategy. If it were so simple as a $20 for $18 pyramid scheme, even idiot ANALS would see it. The wild growth of the Internet allows people to focus on the positives to the exclusion of the unknowns or undesirable aspects of the business plan as they buy into Bezos strategy - and leave him laughing all the way to the bank at how crazily speculators have bid up his stock at this early stage of the game. I think it is very possible that Amazon could turn a profit now. If they stopped hiring people, stopped advertising, started paying off debt, and cut other costs, Amazon would probably make a narrow profit. They said they turned profitable in the book part of the business last quarter. Isn't that great? Speculators must imagine that certainly at some point Amazon will be able to turn from maximizing growth to making a profit. But what if they did that now, or next year, or the year after? Would those profits amount to much? Anyone willing to sit down with a spreadsheet and what is known about cut-throat Internet pricing will come to the understanding that profit margins would be razor thin even under the best circumstances. Can Amazon maximize for profits rather than growth? Yes - but the profits can't start to justify the current, let alone a higher price. The reality that the Internet is both great at automating the sales process and also at automating the ease of shopping and price comparison is starting to become apparent even to idiot ANALS. Studies have shown the number one reason why people buy on the net is for price. The second reason is convenience and ease. Then comes familiarity and confidence in vendors. As buyers experience with the Internet grows, the confidence that they are unlikely to get ripped off or their credit card data stolen will increase while the insatiable desire for better pricing will remain. The media is the message.