Hoping to capitalize on what is expected to be a lucrative holiday shopping season on the web, online bookseller-cum-music store Amazon.com has branched out further by opening two new stores. Amazon has launched both a video store and a holiday gift store that will sell – in addition to books, videos, and music – personal electronics, games, gadgets, and toys. Amazon says the video store offers more than 60,000 videos and more than 2,000 DVDs accompanied by its search features and editorial content, allowing shoppers to find the desired title at prices up to 30% off. The gift store is an added incentive to holiday shoppers to take care of more of their needs online and avoid the crowded malls by offering wrapped gifts delivered to the recipient with a personalized message. It’s all about big money for the company, though, as research from Jupiter Communications Inc projects, online spending will hit $2.3bn during the holiday period, up from $1.1bn last year. The video store represents Amazon’s third product line, following its original line of books and then CDs, which it added in June. The company now claims to be the internet’s number one book and CD retailer. Analyst Lise Buyer at Credit Suisse First Boston says it’s difficult to predict what kind of initial share of the $8bn market for videos Amazon can hope for, but sees reason for optimism. Buyer points out that, in the its first full quarter of music sales, the company’s $14.4m in revenue exceeded totals for all the incumbents in the category. CSFB believes that Amazon is positioned for a strong holiday season, with total revenue for the quarter approaching $200m. The bank expects earnings per share for the year of $1.71 and projects EPS for fiscal 1999 at the $1.67 level. It maintains a long-term buy rating on the company’s stock, despite the fact that it doesn’t expect the company to show operating profit until mid-2000, as it believes that business models which leverage the internet will prove to hold considerable economic power.
