Paternot: A lot of the early players in the market have fallen out of favor. Unless they've completely redefined themselves, they've lost a huge amount of their market value.
Nisenholtz: Well, it's like social Darwinism on the Internet, if you will. The early players . . . If you look back at '94, there was GNN and there was the wais Search Engine. There were all these players that don't exist now.
Kurnit: But you see, that's an interesting attitude. Every company that thinks that it should survive in its original form isn't going to make it in the Internet.
Suh: You know, it's not like this sector can go down and every Internet company just becomes worthless overnight. It can't be that.
Judson: Well, you could have a biotechlike scenario. There was a time when everything in biotech was terrific, and then nothing in biotech was terrific, and then the quality re-emerged.
Suh: At some point, the Internet is going to disappear as a sector, and it's going to just become . . . It's like the telephone. It's like saying, "Well, if the telephone sector goes down, many of us will go out of business."
Judson: I actually think that the telephone sector, because of IP through the Internet, is questionable. Laughs
Wolff: Let me pursue this: By that logic, Amazon finds itself next year or the year after no longer in the Internet business but in the bookselling business or the retail business.
Suh: They always have been.
Wolff: Well, no, they haven't. Because obviously, if they were, they would be valued on the level of the book business and the retail business.
Suh: No, that's not true. Amazon.com's great . . . the key to their great success is that they sell books really well.
Wolff: Well, if you discount books at 30 percent, virtually anybody could do it fairly well. I mean, they don't sell books better than Barnes & Noble.
Kurnit: Yes they do. They absolutely do.
Wolff: They sell books online better than Barnes & Noble sells books online.
Kurnit: No, excuse me. They sell books better than Barnes & Noble. Period. Period!
Wolff: Our evidence?
Kurnit: One, I buy three times more books than I did five years ago, and two, I will never step into a bookstore to buy a book. I will go in to browse and hang around and buy a cup of coffee. But when it comes time to buy, one-click ordering and thank you very much. They sell books better.
Suh: They sell books brilliantly.
Judson: Still, where does it end? When does someone make money? Laughter That's kind of the concern.
Kurnit: People are making money left and right on Amazon right now!
Suh: Yeah, buddy!
Kurnit: This is no different than any other business in the history of mass retail. You know, everybody says it's all price wars and it's all price-sensitive. I've got to tell you, there's a certain segment, and I include myself . . . I don't care if Amazon charges me another dollar or two. I'm a loyal Amazon customer because that's where I started off first.