Profile:
Amazon is one of the best known Internet companies and has a very strong brand name. AMZN started as an online book store but it now offers much more than books. Since Amazon is so well known it tries to be synonymous with online buying. The company wants to be the biggest marketplace for consumer E-commerce. It started with the addition of CD's; then videos followed and now there are several categories. Amazon is the company that is always the subject of conversation between Internet haters and lovers. The non-believers say Amazon will never make a profit and that therefore the stock is way too expensve. The believers tell you that we are only at the beginning of E-commerce and that Amazon will grab a big share of that in the future. The biggest topic in those debates is profit. This is one of the most asked questions in the Internet space: when will Amazon make a profit? Good question but hard to answer, since Amazon changes its business model all the time. Recently they added zShops. It allows anybody to open a shop at Amazon and sell up to 3000 products. Amazon will host your online shop and you pay rent for the privilege. No inventories for Amazon so it could be very profitable. But how about Amazon's own (costly) inventories? Well, we think Amazon's strategy is to make online shopping as comfortable and safe as possible. The company wants to deliver goods within 48 hours and is betting that consumers are willing to give up a lowest price guarantee for that. So Amazon is building warehouses around the world to serve consumers in the best possible way.

Amazon will remain one of the biggest Internet companies because of its size but also because of its trend-setting nature.

Management: Jeff Bezos is the big man here. In interviews he is quoted as being a person that doesn't work very hard and likes to sleep long. Do not be fooled by that. We think this man is very awake and a keen manager. Behind his naive smile hides a very shrewd CEO so let the competition beware. He finished Princeton summa cum laude in Electrical Engineering and Computer Science and helped build one of the most technically sophisticated and successful quantitative hedge funds on Wall Street for D.E. Shaw & Co.!!

Started: 1995 (first online sale july 1995)
IPO:

Amazon on the Web:
main page: http://www.amazon.com
daughters:
- Internet Movie Database
- LiveBid.com
- PlanetAll.com
- zShops.com

investor relations: click here
current stock price: click here

Main competitors:
Since Amazon is much more than a bookseller it is not sufficient to mention Barnes&Nobles.com as the big competitor. Amazon also offers auctions so Yahoo and Ebay are in the space. Be also aware of offline competitors like WalMart. They will move to the Internet in a big way.

Propus personal view:
Amazon has been a volatile stock and remains a proxy for online E-commerce. Its business model is a mixture of offline retailers (inventories!) and online commerce. The company is willing to take risks in trying to be a horizontal E-commerce player. For every product line they add they face another competitor. For example, when they add toys they will have to compete from day one with E-Toys and Toys-R-Us. It bets on its famous brand name and its shopping convenience. The zShops could be big but we think local competition, especially international, will be fierce. The biggest treasure within Amazon is its client base. Cross selling is an enormous opportunity so don't be surprised if they add more product lines.