TODAY’S CLASS 5:00-6:30 Crossfire: Valuation 6:30-6:45 Break 6:45-7:40 Case discussion: Amazon.com
excite@Home NEXT CLASS GUEST SPEAKER Steve Harris Topic: “Using Customer Data to Develop Evaluation Metrics”
Homework due next session Prepare Case: Chapter 7 Prepare Crossfire: : Metrics for evaluating e-Businesses
Amazon.com: E-Tail or Fairy Tale?
Amazon.com Snapshot - Bezos started Amazon in 1995 with a customer focus - Metrics (1999) Revenues $1.6 B Net loss $720 M Employees 7,600 Markets: Books (54%), music, DVDs, videos, toys, electronics, software, video games, home improvements, and lawn and patio
Amazon.com: Does the M&A investment pay?
Disagreement Over Goals Amazon Management Shareholders - Growth in new industries - Profitability - Partnership/affiliations - Positive cash flow - Market share - Higher stock price How do you merge these goals and develop a strategy to meet the vision of becoming Earth’s Biggest Store?
Amazon & Toys ‘R’ Us: The payoff of clicks-and-bricks Amazon.com Toysrus.com Eliminate inventory management risk Gain three revenue streams: revenue share on product sold up-front fee payments for S & H Offloads burden for online infrastructure, distribution & customer service Quicker profitability 2 years ahead of plan Ref: Business Week, Oct 23, 2000, pEB 44
A Pretty Web Site is not Enough
“The Amazon.com platform is comprised of brand, customers, technology, distribution capability, deep e-commerce expertise, and a great team with a passion for innovation and serving customers well.” Jeff Bezos 1999 Annual Report
“We believe that we have reached a ‘tipping point,’ where this platform allow us to launch new e-commerce businesses faster, with a higher quality of customer experience, a lower incremental cost, a higher chance of success, and a clearer path to scale and profitability than perhaps any other company.” Jeff Bezos 1999 Annual Report