I wrote
> >> In an earlier posting, I suggested that the only way to guarantee a
> long-term profit on IT investments is either:
>
> >> (1) hold a franchise in government-sanctioned intellectual-
> >> property monopolies (de facto or de jure)
> >> or
> >> (2) gamble and win big in the financial markets
To which Dave Davies responded: "WOW !! I always thought it was more
like - Create a Product or Service that represents good value to a
significant number of people, establish a solid reputation and refine and
develop to keep ahead of competition."
Exactly what Amazon has done with its IT strategy.
But Amazon has never turned a profit.
In fact, in a deal it signed with AOL not long ago, Amazon agreed to keep
secret any negotiations about actually being acquired by AOL, and, more
important, that transfer of ownership to AOL of its assets would *not*
include transfer of the entirety of its current, staggering debt.
In other words, AOL will clean Amazon's Chapter 11 sheets, except for the
bloodier ones, leaving those to the hapless non-insider stockholders. (My
guess: it wraps sometime early next year.) A good thing too -- by any
current measure, Amazon is a dog of an investment, with all that debt, and
its (relatively) slim and toothless patent portfolio. But it would be a
shame for it to go away entirely. Too bad it has to happen under a
consolidation of media power under AOL whose only modern American parallel
was the Hearst empire.
[Davies]
> In such case profits take care of themselves, financial markets are
> irrelevant and monopolies are unnecessary.
Evidently not.
Anyway, there are plenty of good reasons to have an IT strategy. Profit,
however, is not a very good one. In wireless or in anything else.
-michael turner
leap@gol.com
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Received on Fri Sep 21 07:36:39 2001