Boring Portfolio

How Borders.com Compares
...stacking up the big three book e-tailers
(FOOL GLOBAL WIRE)
by Greg Markus (TMF Boring)

ANN ARBOR, Mich. (July 6, 1998) -- The Boring Portfolio kept pace with the major market indices Monday, rising 0.88% in net value. Six of eight holdings gained ground. TCBY Enterprises (NYSE: TBY) was unchanged at $9 1/4, while Andrew Corp. (Nasdaq: ANDW) retreated $3/16 to a bid of $18 1/4.

FelCor Suite Hotels (NYSE: FCH) gained $7/16 to $31 1/4 after receiving a favorable mention in this weekend's issue of Barron's. A fund manager pointed out that the stock is an exceptional value. Heck, we've being saying that for months.

Shares of Borders Group (NYSE: BGP) continue to show strength. The stock rose $5/16 in heavy trading to establish another new high, at $39 15/16.

Borders stock appears to be benefiting somewhat from the hoopla surrounding anything and everything associated with the e-commerce -- that despite the fact that Borders.com's "official" grand opening won't occur until later this summer.

Make no mistake, Borders.com is definitely open for business. I've made two transactions there in the past few weeks, both slick as a whistle. I've also conducted a bit of comparison shopping for books, audiobooks, and music to see how Borders.com compares to rivals Amazon.com (Nasdaq: AMZN) and the Barnes & Noble (NYSE: BKS) Website, Barnesandnoble.com (a real albatross of a name for a Website, if you ask me).

My wholly unscientific audiobooks survey this past weekend compared price and availability for 16 current bestsellers -- everything from John Krakauer's two nonfiction thrillers to Frank McCourt's Angela's Ashes, to a couple of investment books by two brothers named David and Tom Gardner.

Bottom line: there ain't a dime's worth of difference among the major sites. For the vast majority of titles, advertised availability and price are identical. Shipping costs are, too. Very occasionally, one title will be a bit cheaper at one site than another (e.g., All the Pretty Horses was $0.90 less at Borders.com versus Amazon.com, whereas Angela's Ashes was $2.50 less at Amazon when I looked). I spotted no differences in availability.

All three sites were equally easy to navigate, and ordering is speedy and straightforward.

Where Amazon's and B&N's sites have it all over Borders.com is in search capability, especially now that B&N has rolled out its latest improvements. Most irritating about Borders.com is the way it limits listed results to 100 titles. The Borders site also betrays its "work in progress" status when it comes to book reviews and summaries.

Will Borders.com ultimately match its peers in technical capability and depth of information as well as it currently does in price and availability? Well, the Borders people claim it will.

There is one area in which Borders.com is not expected to come close to the other major online booksellers, however, and that's marketing expense. Borders executives have repeatedly said that they have no intention in getting involved in the "feeding frenzy" (CEO Robert DiRomualdo's words) for Web "real estate."

Given the secrecy with which Web retailers guard their business plans, I'm not sure how much information I'll be able to pry out of Borders about the future of Borders.com. But I'm going to try. As soon as I learn something, I'll pass it along.

FoolWatch -- It's what's going on at the Fool today.


07/06/98 Close

Stock  Change    Bid 
 ANDW  -  3/16  18.25 
 CGO   +  1     37.25 
 BGP   +  5/16  39.94 
 CSL   +  1     45.19 
 CSCO  +  3/8   92.94 
 FCH   +  7/16  31.25 
 PNR   +  1/8   41.31 
 TBY     ---    9.25 
  
 
                   Day   Month    Year  History 
         BORING   +0.88%   3.35%   7.77%  35.60% 
         S&P:     +0.95%   2.07%  19.26%  86.18% 
         NASDAQ:  +0.82%   0.78%  21.59%  83.43% 
  
     Rec'd   #  Security     In At       Now    Change 
   2/28/96  400 Borders Gr    11.26     39.94   254.80% 
   6/26/96  150 Cisco Syst    35.93     92.94   158.64% 
   8/13/96  200 Carlisle C    26.32     45.19    71.65% 
    3/5/97  150 Atlas Air     23.06     37.25    61.55% 
   4/14/98  100 Pentair       43.74     41.31    -5.56% 
   5/20/98  400 TCBY Enter    10.05      9.25    -7.91% 
   11/6/97  200 FelCor Sui    37.59     31.25   -16.87% 
   1/21/98  200 Andrew Cor    26.09     18.25   -30.05% 
  
     Rec'd   #  Security     In At     Value    Change 
   2/28/96  400 Borders Gr  4502.49  15975.00 $11472.51 
   6/26/96  150 Cisco Syst  5389.99  13940.63  $8550.64 
   8/13/96  200 Carlisle C  5264.99   9037.50  $3772.51 
    3/5/97  150 Atlas Air   3458.74   5587.50  $2128.76 
   4/14/98  100 Pentair     4374.25   4131.25  -$243.00 
   5/20/98  400 TCBY Enter  4018.00   3700.00  -$318.00 
   11/6/97  200 FelCor Sui  7518.00   6250.00 -$1268.00 
   1/21/98  200 Andrew Cor  5218.00   3650.00 -$1568.00 
  
                              CASH   $5528.69 
                             TOTAL  $67800.57 
 

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