Overstock Paddles the Amazon

"A danger sign for any leader is if they become the issue. It's usually time for that leader to do something drastic, and that usually means leaving." -- University professor

The following quotes are from various commentators:

• "Bezos has lost control."
• "Bezos' high profile may be as much a liability as an asset."
• "He's become a lightning rod."
• "They (Amazon) still need a chief executive officer like Joe Galli."
• "Jeff Bezos is justifiably considered a brilliant person ... it would benefit everyone if he would apply that brilliance to running the company."

This scorn and ridicule were directed at Bezos only a couple of years after he was being widely acclaimed, including being named Time magazine's "Man of the Year." It's interesting to note that Patrick Byrne was named an "Entrepreneur of the Year" by Ernst & Young in 2003 and was listed in 2002 as one of the 25 "most influential people" in e-business by Business Week.

Value investor Bill Miller, manager of the Legg Mason Value Trust (LMVTX), was a lone voice of rationality on Amazon back in 2001. As one commentator put it, "to the bewilderment of his peers, Miller believes Amazon's business model will one day emerge victorious."

How did Miller see through the negativity? He said that investors have to set aside "preconceived notions" and look at "the long-term reality."

In my next column, which should publish next Monday, I'll go into detail about the long-term reality of the Overstock model, its earnings power and how to value the company.

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