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

To: Lizzie Tudor who wrote (55060)	5/4/1999 1:47:00 PM
From: Elmer	Respond to of 164684

You have a point about the big players forcing out the smaller players on the internet. The reason I tend to agree with Bogle, however, is that even if a company like AMZN becomes huge on the net, it probably will not be able to erect serious barriers to competitive entry. Anytime AMZN raises its prices, new competitors will emerge overnight. Some have argued that the customer familiarity of the AMZN site as well as customer profiling for "add on" sales will give it some competitive advantages. Perhaps. But my belief is that most internet customers are very smart customers and that they purchase fungible items almost exclusively on price. AMZN strategy of buying market share through huge and increasing operating losses seems to confirm my theory on price. It looks to me that they are trying to scale operations so that they have purchasing economies like Wal-Mart, for example. Otherwise why would they want to be one stop shopping on so many diverse items like books, drugs, CD's, etc. But AMZN isn't the electronic incarnation of WalMart. Inktomi's shopping engine, for example, should insure that those who shop for price will go elsewhere if they aren't price competitive. And if the INKT shopping engine doesn't keep AMZN honest on pricing, the land based stores will. But don't get me wrong, AMZN will survive and do well but probably not as well as most current shareholders think. PS Bogle didn't mention Dell.