Tags: Amazon.

Many of these analysts are so young that they don't remember the hype of 1999 and that is why it seems to be repeating itself again, but at least they realize that Amazon is overvalued.

 

Submitted: Jul 26, 2007    Views: 217    Comments: 1    Likes: 2   


View Article: http://biz.yahoo.com/ibd/070725/tech01.html?.v=1


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Comments Received:

Sam Cass
Sam_Cass

I think the analysts might be wrong here. Amazon might have a temporary pull-back but its long term outlook is good. It's grabbed a huge piece of the online consumer distribution business. That's where the money will be long-term. Eventually, Amazon will be distributing e-books and mp3s and its margins will skyrocket. Many also don't know that Amazon has quietly become a software company. It's hosting service is used by many large Internet sites. This will eventually also be a high margin business.

Google's market cap is 160 billion while Amazon's is only 35 billion. Google is trying to find a way to grow beyond its ad business while Amazon has several clear paths to future growth.

My dollars go to Amazon.

Posted: Jul 26, 2007

Author/Submitter Response:

To say that Amazon should have a market cap anywhere close to Google is ridiculous. Amazon trades at a significantly higher multiple to growth, and their core business is one that has no technological barriers whatsoever, and that will become more true as they convert the business to e-books and mp3s. The company may do a little software and hosting on the side, but the valuation is richer than other companies in the hosting and software space.



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