Can Amazon become the Wal-Mart of the Web?

Amazon.com (NASDAQ:AMZN) has gone from ‘that bookstore’ in people’s mind to a general online retailer.  Amazon’s worldwide media sales grew only 1% this past quarte highlighted by a slowdown in video games.  But during the same quarter, sales of other products, which the company lumps together on its balance sheet in a grouping dubbed “electronics and general merchandise,” grew by 35% to $2.07 billion -- watch out Wal-Mart Stores Inc. (NYSE:WMT).

AN AMAZON WORLD
Wall Street has been going to bat for Amazon this year, in 2009 Amazon shares are up 76% and are closing in on $100.  This week Merrill Lynch/Bank of America (NYSE:BAC) upgraded Amazon to a "Buy" and raised its price target from $95 to $103. 

Merrill believes eCommerce sales will rebound to double-digit y/y growth in 2010, resuming the secular shift Online that was interrupted by the recession. Amazon has built sustainable competitive advantages in eCommerce including customer loyalty, distribution infrastructure, as well as technology investments, and these advantages have shown through with a sales gap to ecommerce growth between 1,700 and 2,800bps over the past six quarters.

NYTIMES.com's three page article on the subject is worth your time this weekend (click to read).

Bottom line -- Amazon is shaking up retailers, both big rivals and small independent stores, as it speeds its way beyond books toward its goal of becoming a Web-sized general store.  Expect more analysts to jump on the Amazon train, even at $100 a share its a tempting buy.  If Amazon.com's "electronics and general merchandise,” grew by 35% to $2.07 billion in the last quarter, imagine what that number will be in Post Recession world 5 years from now?

Click to Read NYTimes.com --Can Amazon Be Wal-Mart of the Web? >>

SOURCE: http://www.nytimes.com/2009/09/20/business/20amazon.html?_r=1&partner=rs...

Disclaimer: No positions in any of the securities mentioned in this publication.