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

To: John Donahoe who wrote (51726)	4/20/1999 12:02:00 PM
From: Rob S.	Read Replies (2) \| Respond to of 164684

The studies were very thorough. The IBM study used mainframes and complex modeling software to extrapolate out the effects of embryonic developments and the nature of the Internet. Is it that difficult to see that brand influence will become less, not more important? The great thing about the web and digital communications in general, is that information can be easily stored and manipulated. Add that to the multi-point versus broadcast type communication and you get a much greater ability to build up product and usage information. That runs counter to broadcast technologies upon which branding strategies developed. "Branding" is a relatively new development in human enterprise. It was only made possible as a direct consequence of, and became a necessity to pay for, the development of newsprint, radio, and TV broadcast media. The Internet is not a broadcast media. It can act partially like one but it's basic nature is different. It is many-to-many vs. one-to-many. Besides that, it is digital and that allows many more people and businesses to become information authors and have immediate access to everyone else. The fundamental nature of it spawns greater, not lesser competition. Right now the Internet is unique and Amazon has "first mover advantage". But why hasn't that gotten them profits instead of growing losses? The main reason is that they have to sell their products at a discount to normal retail pricing levels. And they give away products to gain customers. And competition is just beginning. The Internet is in it's infancy and so is competition. What about the "Internet's Gorilla networking" effects. That's a great influence but one that is pervasive. Amazon has done well with their associates program. But guess what? Barnes and Noble adopted much the same program and so have a ton of other internet companies. Barnes has reported a large jump in the number of associates they have signed up. Software is now available to help you sign up for and manage the numerous associates programs so you can offer products from Amazon and at the same time products from Barnes or others. And guess what? These programs help you to monitor which program offers you the highest payments and to switch to the ones that do very easily. And then there is the development of "Shop Bots". So far we have seen a few of these ecommerce specific search and comparison engines. They won't become that much of a factor for a few years when the novelty of the Internet wears off and people use it more like an appliance like the telephone or TV. Then they find the best deal with the click of a button. Yes, Amazon has early mover advantage. It certainly has early mover advantage in the stock price. The effects of competition on profits is easy to ignore now.