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Amazon: The King of the Jungle


Amazon beat all comers by taking a page straight from Sam Walton. It served the customers.

Like the river for which it's named, you've got to back up to get a perspective on Amazon (AMZN). You've got to back way up.

To see the story you have to forget that Amazon was one of the original "Internet Bubble" stocks. You have to forget that Amazon was born in the great free money binge of the 90's and remember that Amazon has never actually done anything other than what Jeff Bezos always said he was going to do.

Competitors have come and gone. Books-A-Million (BAMM), Barnes & Noble (BKS), Target (TGT), Wal-Mart (WMT), Egghead Software, Some still exist, some are lost to the annals of time but all, at one point or another, were proclaimed to be Amazon Killers or, at the very least, "The Next Amazon".

None of them even came close. Through all the hype, noise and bubbles past and present, Bezos has pulled off the greatest trick of the Internet Age. He built a real-life, genuine, customer-focused general merchandise retailer based entirely on-line.

There are no Amazon stores. The company doesn't need them. There are partnerships, many with the former would-be killers, but none of them trump the host. They all work within the context of being part of Amazon. That's how both Amazon and the partners themselves want it.

It's hard to remember now but not so long ago the brick-and-mortar guys all thought they could be Amazon. They all created vast "Internet Divisions" designed to one-up the original. "If this bubble-stock book-seller can sell on-line" they'd harrumph "think how huge (Wal-Mart, Target, Best-Buy (BBY) etc.) will be!"

Not very big at all, as it turns out. At least not unless they partnered with Amazon.

Don't miss Hoofy & Boo as they take on the online retailer in Amazon: Books Were Just the Beginning. Sean Udall also expressed his views in Deep in the Amazon Jungle.

Amazon beat all comers by taking a page straight from Sam Walton. It served the customers. Amazon is the friendliest, easiest, safest place to shop on-line. By somehow staying focused on that mission, the company has survived its CEO being declared Time's Man of the Year, a historic stock market crash and a devastating plunge in its own stock-price on more than one occasion.

Lesser companies than Amazon long ago gave up the pretensions of simply "setting up a web-site" and crushing Amazon. Lesser CEO's than Jeff Bezos have cashed out, burst into flames and missed the whole resurgence of the on-line dream (read about Priceline's (PCLN) Jay Walker lately?).

Bezos remains. By force of will and quirky charisma, he kept the company focused. He somehow played the bubble without being blown-up by it. He took the "free money" of the on-line gold-rush and used it to create the greatest on-line retailer of them all.

Amazon's stock will ebb and flow. I personally don't like it here but, then, I haven't liked it all year and I've been dead-wrong. I missed it because I stood too close to the story. I let myself get consumed by the noise and didn't see the big picture. In the big picture, Amazon the company has won. It's created a great retailer from scratch, just like it always said it was going to do.

I'm not buying Amazon here but the company itself is beyond reproach. It is the king of on-line retail. You can dislike the stock but, if when you back up and consider the big picture, you simply have to respect the story and the man who created it.

Amazon has earned it.
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No positions in stocks mentioned.

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