‘Twas
the month before Christmas and all through the Web e-tail stocks start
stirring, though some thought long dead…and up on the rooftop click, click
click, down through the modem comes the new St. Nick.
We predict this year’s holiday buying will blow away expectations and
forever change the gift-giving season and estimate that as many as 10
million Web users in the U.S. may buy at least one gift online, about
double last year’s numbers.
Driving that belief is the reason that people don’t
want to drive. Don’t want to battle other potential customers for the last
Beanie widget/gadget/whatchamacallit. Why, when you can buy it on the Web,
they wrap it, ship it, slap it, zap it, right to its destination and you
probably got it at a better price than if you had stood in line.
We’re
seeing this pre-holiday fervor already push shares up of some more
well-known e-tail stocks. So which e-tail stocks are we keeping an eye on?
The list:
| Popular Products Web Consumers Buy | |
Item, | Stocks |
Software | Egghead |
Books | Amazon.com |
PCs | Dell |
Music | CDnow |
Gifts | AOL (NYSE:AOL), |
Travel | Preview Travel |
Clothing | AOL |
Electronics | ONSALE |
Food | AOL, Peapod |
| category source: Cyber Dialogue; stock list from Internet Stock Report (c) 1998 Mecklermedia | |
There’s Amazon.com (NASDAQ:AMZN), ONSALE (NASDAQ:ONSL), Egghead.com
(NASDAQ:EGGS), Beyond.com (NASDAQ:BYND), Digital River (NASDAQ:DRIV), and
more (see the table). Here’s why we’re watching this group closely:
but before Amazon books were just books. Now they’re cool. Added music
sales this past quarter and in one quarter surpassed leader CDnow
(NASDAQ:CDNW) in sales. Wants to be the personal Web store for everyone. A
long way to go, but it’s done some remarkable stuff so far.
done well in this realm, despite a lack of recognition by the general
media. Almost unnoticed in Egghead’s offings, surplus auctions, similar to
ONSALE (NASDAQ:ONSL), which we believe has a lead in PC auctions. ONSALE
also auctions off hardware, consumer electronics, cars, and more.
but we think those same people go home and may think of buying DELL for
gifts and themselves this holiday season. DELL now reports selling $6
million per day of PCs via the Web. It was just $1 million a day, a year ago
and that was thought to be phenomenal at the time.
Where DELL wins in
brand name, we think ONSALE wins in a better model–let the bidder decide
what to pay, not the box maker. Similarly, we think eBay (NASDAQ:EBAY),
already overheated in our opinion, could get more heat from its abundance
of Beanie Babies that may prove a gift favorite. The Cabbage Patch doll of
the 1990s.
(NASDAQ:NTKI) ahead of Amazon for one reason: we want to see if the
exclusive e-tail deals the two cut with top traffic sites and services will
pay off. N2K is the exclusive or preferred online music retailer for AOL,
Netscape, Excite, WebTV, @Home, iVillage, AT&T WorldNet, StarMedia,
PointCast, CBS Cable’s CMT, TNN, country.com, and MTV International in
Europe, Asia, Japan, and Brazil.
CDnow has pacts with Yahoo!, Lycos,
Lycos-Bertelsmann, Webcrawler, Tripod, Geocities, MTV/VH1, Rolling Stone
Network, and CBS.com.
For holiday travelers there’s Microsoft’s
(NASDAQ:MSFT) Expedia which gets good reviews and Preview Travel
(NASDAQ:PTVL). Preview has signed up 5 million subscribers and has deals
with AOL, Excite, Lycos, Snap and USA Today. It made its fare search engine
available to other Web sites, free of charge.
and for that we think AOL could get a lot of interest because of its
general purpose appeal. Last year clothing was the #1 selling product on
AOL. While we’re at it, check the top sellers on AOL in 1997– 2. Food, 3.
Books, 4. Flowers, 5. Electronics, 6. Music, 7. Toys.
For that
reason we also think AOL could show strong food sales with the usual
holiday non-perishable food exchanges. Let the fruitcake beware.
At the
end of the sleigh bell ride, however, when sales get counted in
January/February, we don’t think that every e-tail stock wins in the way they
could if a fully-stocked easy-to-use, well-known supermart of products was
available.
This is one reason we’re keeping a close eye on what Amazon plans to do with
shopping comparison engine Junglee and what Inktomi (NASDAQ:INKT) will do
with a similar service it acquired. We believe 1998 will be a turning point
but 1999 will be the main event as Web-based shopping grows up.
Tell uswhat categories and which
e-tail sites you favor buying gifts from, results next week…
Join Steve tonight for a real-time Internet stock chat, 5 p.m. Pacific time
– click here
for
details.
