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To: KeepItSimple who wrote (46914)	3/23/1999 12:20:00 PM
From: Bill Harmond	Respond to of 164684

Still long. Haven't sold anything. I don't care if Amazon goes back to 84.

To: KeepItSimple who wrote (46914)	3/23/1999 12:21:00 PM
From: Olu Emuleomo	Read Replies (2) \| Respond to of 164684

>>>I'm looking for 115 by today's close, to cover from 131. Dream on! --Olu E.

To: KeepItSimple who wrote (46914)	3/23/1999 2:42:00 PM
From: Glenn D. Rudolph	Respond to of 164684

11 spending lots of time at a single Web retailer's site. Wendy also shared with us that there is an emerging bifurcation between the haves (those Internet retailers that “get it”) and the have-nots (those that don't) that comes down to these retailers ability to establish and then build a relationship with their online customer. Those Web retailers that understand the medium (and are generating nice revenue from it) tend to have a direct marketing or relationship marketing backgrounds rather than a traditional retailing resume. Why is this important? Because relationship marketers think about two levers in their business (not just one): (1) getting the first transaction and (2) making sure they get all the rest. Establishing methods to measure and differentiate between first-time buyers and come-backs is key to generating significant revenue through this channel. Bringing technologies and marketing assets to bear to drive repeat buying is as important (or perhaps more important depending on the specific retailing category) as driving either traffic to the site or incenting first-time buying. In hindsight, we believe this may be the key reason why so many of the first Web retailers have disappointed the Street with their results (like N2K or CDNow); exclusive traffic deals on the portal sites proved to be far too expensive simply because the locus of these deals was driving traffic, not driving repeat purchases. Wendy also gave us AOL's macro view of the online marketplace; about which categories they believe can be successfully “mined” for relationship retailing. Specifically, they break down (quite logically, we might add) Web retailing into three distinct categories: relationship, price, and contextual. The price category is straight forward: consumer electronics, PCs, and the like. These goods are already commodity categories off-line that are driven mostly by price; they will remain driven by price and we should expect competition to revolve (first) around product pricing. The opportunity to build an online retailing relationship with the customer is small since loyalty is difficult to establish via price alone. The contextual category offers far more opportunity for relationship building between retailer and customer than does the price category. Furniture, home products, decorative, gardening and the like where transaction are large and infrequent, where manufacturers' brands are unimportant and where the off-line competition is scattered (in geography) and fragmented (in number). The relationship category, of course, offers the greatest opportunity to establish an ongoing association between retailer and customer. Apparel, cosmetics, books, CDs, toys, appliances, “home center” (i.e Home Depot, Lowes), and housewares are all good examples of categories where relationships can be established and reinforced, leading to greater predictability (and size) of revenue. Why are the dynamics behind relationships key to understanding these investments? Simply because, relative to off-line retailing, online retailing offers far more visibility and “model-ability”. The Street can better model the revenue, cost, and cash flow characteristics of an online retailer because of their ability to establish and drive customer relationships. This, in turn, makes the investment less risky and allows the online retailer to get a better valuation. So as you parse the investment opportunities in the Internet retailing space, keep in mind how important and unique this concept is; it can make all the (shareholder value) difference in the world. No Entry