Jonathan Berr
Wall Street continues to have questions about Amazon because of its narrow profit margins and its rising costs for services such as free shipping. Some Amazon moves have puzzled observers, including its move into the highly competitive grocery business. But there is some hope that Amazon's expected move into digital media will bolster growth at the Seattle-based company.
Despite the improved share performance, it's unlikely that investors will abandon their preference for Internet media. IAC has only six analysts rating it a buy. Amazon has three, and eBay 16. To compare, Yahoo! has 24 buy ratings and Google has 31, according to data on Bloomberg. "You are taking about a highly competitive, low-margin business," says Chervitz of Internet retailing.
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