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

To: Sarmad Y. Hermiz who wrote (57674)	5/21/1999 10:13:00 AM
From: Glenn D. Rudolph	Read Replies (1) \| Respond to of 164684

AMAZON ˆ INVESTMENTS SHOULD ENHANCE STOCK Amazon took a 35% stake in HomeGrocer.com this week. We believe the $42.5 million investment is money well spent, as HomeGrocer provides Amazon with an opportunity to break into yet another young eTailing product category, this time home delivery of groceries ordered online. We anticipate this is only the beginning of a stream of upcoming announcements concerning Amazon‚s business development plans. While we continue to play the guessing game about the likely next categories (our choices include software, travel, toys and jewelry), we believe Amazon‚s long-term goal is clear -- to offer shoppers everything imaginable on the Web at competitive prices. With potential for Amazon to shift to more of a landlord than a tenant on line, we suspect the business model will start to look increasingly attractive. Further, as their „portfolio‰ companies go public, we expect their exposed underlying market values could help drive Amazon shares to return to and move past its previous highs. This week Drugstore.com filed for an IPO, less than three months after it launched its Web site and announced Amazon‚s minority investment. DIGITAL SOFTWARE ˆ AN OBVIOUS PRODUCT CATEGORY - Dell recently selected Digital River as its fulfillment partner for digitally downloaded software titles on its Gigabuys.com Web site. We expect competition in the software category to heat up as software sales shift online and broadband penetration facilitates an accelerated transition to digital delivery. We liken software to digital delivery of music, but while we remain challenged to pick digital music‚s winners, we have greater visibility on the software players. Digital River‚s primary competitor for back-end fulfillment is also the category‚s leading consumer-focused eTailer, Beyond.com. Beyond entered into a similar product fulfillment relationship with Compaq last month. We believe both companies are well positioned to capitalize on this large and attractive eTailing product category and recommend purchase.