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To: edamo who wrote (258)	3/30/1999 12:19:00 AM
From: Chuzzlewit	Read Replies (1) \| Respond to of 419

ed, I think one advantage they have is operational leverage. The ability to substitute variable costs for fixed costs means that these operations are easily scalable, and the use of sophisticated inventory control allows them to operate on OPM (othe people's money). However, if there is no profit engine, as appears to me to be the case with AMZN, the company must depend on growth and a high stock price to maintain cash flow. And that means that when growth ceases and the stock price falls, the house of cards collapses. You may find it interesting to apply Altman's Bankruptcy Predictor (http://www.stern.nyu.edu/~ealtman/) to AMZN. If you do the analysis you will find that if it weren't for the high stock price this company would have a "Near death" ranking. I don't understand the concept of branding when it comes to e-tailers. Braverman talked about AMZN as the Tiffany of the networkers. But if I can buy the same book and the same CD elsewhere at the same price with similar convenience, what is the value of the brand name? I have been grappling with the same set of issues as you, and I continue to come up empty. TTFN, CTC