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

To: KeepItSimple who wrote (57292)	5/18/1999 7:57:00 PM
From: Rob S.	Read Replies (2) \| Respond to of 164684

A Seattle area news talk show had a nice little debate about Amazon's future, (surrogate for other internet stocks as well). One seasoned analyst had some particularly cutting arguments. His summation was that there are no barriers to entry for Internet commerce. Unlike Intel or Microsoft who have copyrights and patents, Amazon has no way to protect others from copying their tactics or entering their business. For example, Lycos announced that they are entering the auction business. Who is next? And when will eBay start selling books and tapes in direct competition with Amazon? Or maybe they will do a deal with a music distributor or other Barnes and Noble. who knows. The bottom line is that there is no limit to competition. The investment analyst concluded that internet profits would be slim at best - lower than traditional retail. That is what every Internut investor has their blinders on - they just won't see it until it is right in their faces.

To: KeepItSimple who wrote (57292)	5/18/1999 8:30:00 PM
From: Glenn D. Rudolph	Respond to of 164684

Profits scarce among top user friendly web sites By Kevin Drawbaugh, European consumer goods correspondent LONDON, May 18 (Reuters) - Only one of 10 corporate Internet web sites which came top of a world survey for user friendliness said it was definitely profitable. Most others ranked by the London School of Economics said they were either losing money with hopes of a turnaround, or were never meant to turn a profit at all, highlighting the Internet's bottom-line limitations. The one site clearly in the black was that of International Business Machines Corp. <IBM.N>, which declined to specify its on-line profit, but said 1998 on-line revenues hit $3.3 billion. "It's certainly profitable," said Simon Ward, European Internet manager for the U.S. computer giant. The same could not be said by German airline Deutsche Lufthansa <LHAG.F>, UK grocer Tesco Plc <TSCO.L> or UK telephone firm British Telecommunications <BT.L> -- owners of the top three web sites as judged by the academic institution. "We're probably right on the edge of being profitable," said Lufthansa spokesperson Anna Richter in Germany. "It's used quite frequently but we don't have any numbers on it." Lufthansa topped the survey, whose results were issued on Monday and which was done on behalf of U.S. business software maker Novell Inc. <NOVL.O>. It looked at 120 web sites owned by some of the world's largest companies. Also ranked were sites by British Airways <BAY.L>, ranked fifth; and U.S. retailer Wal-Mart <WMT.N>, sixth. The survey examined each site's suitability for conducting electronic commerce, from seeking price and product information, to order, settlement and after-sales service. Profitability was not measured, said a School of Economics spokesman. Germany's Deutsche Bank <DBKG.F> had the seventh-best site; Deutsche Telekom <DTEG.F>, the eighth; U.S. cable TV firm Comcast <CMCSA.O>, the ninth; and U.S. entertainment conglomerate Walt Disney Co. <DIS.N>, the 10th. A Tesco spokesman said its web site is a growth area rather than a major cash flow source, but declined to give details. British Telecom spokesman Simon Craven said, "Ours doesn't have any revenues attached to it ... So you couldn't really account for it. It's an information-first kind of paradigm." Electronic commerce on the web -- or buying and selling of goods and services via computer -- is expected to reach $500 billion by 2002, up from $32 billion in 1998, according to U.S. technology research firm IDC. But profits so far have been rare. It is "great myth" that the Internet may someday take over retailing, said Wal-Mart treasurer Jay Fitzsimmons at a recent Goldman Sachs conference on retailing. "We have one of the biggest pages on the net, but we don't want you to tell anybody because the more we ship, the more we lose," Fitzsimmons said. For mass merchandisers, e-commerce can be inherently inefficient, although sellers of high-priced, infrequently bought items should be able to profit by it, Fitzsimmons said. A Disney spokesman in California said the company's web site is "a very successful venture," but declined further comment. Comcast said its web site was not meant to be a money-maker. British Airways spokesperson Sara Jones said, "The Internet site as a whole is not a profit-making service for us ... It's a product that we invest in to assist our customers." Deutsche Bank said its position was similar, while Deutsche Telekom internet editor-in-chief Susanne Paech said, "It's a new medium. You don't make money out of it now, but you have the prospect that it will someday make money ... It has to."