1. TODAY’S CLASS 5:00-6:30 Crossfire: Valuation 6:30-6:45 Break
6:45-7:40 Case discussion: Amazon.com

2. excite@Home NEXT CLASS GUEST SPEAKER Steve Harris Topic:
“Using Customer Data to Develop
Evaluation Metrics”

3. Homework due next session
Prepare Case: Chapter 7
Prepare Crossfire: : Metrics for evaluating
e-Businesses

4. Amazon.com: E-Tail or Fairy Tale?

5. 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

6. Amazon.com: Does the M&A investment pay?

7. 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?

8. 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

9. A Pretty Web Site is not Enough

10. “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

11. “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