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

To: Randy Ellingson who wrote (42268)	2/24/1999 4:06:00 PM
From: Rob S.	Read Replies (1) \| Respond to of 164684

Drugstore.com is one of the better possible investments that Amazon could make. Although the price they paid for the 40% stake is not clear, it makes sense on the surface because drug sales via the Internet is not likely to be nearly as competitive as free market commodity sales. Selling (dispensing) drugs via the Internet will require involvement with regulatory authorities to assure standards of facilities, personnel, tracking, and shipment are met. It also will require validation of prescriptions and customers. While this is not as simple as picking something out and ordering it, the market is huge. DrugStore.com was discussed on this thread 2-3 months ago as a possible acquisition target. To be successful, DrugStore.com needs to establish licensed distribution facilities and methods. They also need to gain the trust of the public and cooperation of the drug and medical establishments. What is most important to Amazon is to participate in market segments that will not be as much of a price competition blood bath as will books and other commodities. So, this is, or something very similar, a logical and necessary move if they hope to eventually return a profit to shareholders. But before bulls get overboard with speculation, the key reason most people will have for purchasing regulated products over the Internet will be cost savings. In most cases, it will be less convenient than buying from the local pharmacy - bed-ridden customers being the primary exception. It will require special Fed-X or UPS delivery with proof of identity - front porch drop shipments will not be allowed (Sure you can buy a $5.95 enema bag and not have to sign for it). The cost of delivery must be considered when determining the feasibility of drugs via the Internet. Still, there is the opportunity to streamline and automate inventorying, order assembly and other costs of a typical pharmacy. It is possible that DrugStore.com will appeal to managed health care organizations and to patients who are on a costly routine drug regimen.