It may seem a little late for (NASDAQ:OSTK) to party like it's 1999. Some of you may think of Overstock as an Internet company that missed the era of greatness, when investors didn't cast such a jaundiced eye on the sector and its rep for irrational exuberance. However, not only is it sometimes better late than never, sometimes it's good to flout the rules and be fashionably late.

Several online retailers were major pioneers of e-commerce, and those names are probably at the forefront of your consciousness -- if not in the shopping section of your browser. (NASDAQ:AMZN) and eBay (NASDAQ:EBAY) definitely spring to mind. And these are the online shopping giants that's got in its sights.

Some might say that and its infamous CEO Patrick Byrne are crazy to even consider such a thing. Unseat Amazon and eBay, the two online giants that pioneered-- even legitimized -- the whole idea of buying and selling on the Internet? Byrne and his minions must be crazy.

Well, there is such a thing as being crazy like a fox. And recent developments are likely making naysayers think twice about saying, well, nay. It's not just recent earnings announcements that deliver perfectly good numbers. But it's also about the fact that Overstock's doing a very good job of taking advantage of the bones rivals throw. Sometimes coming late to the party may just mean the party's just starting to get hopping.

The overture's humble beginnings were in 1999 -- right before the Internet bubble started to spring a leak. In fact, launched without any outside funding and, if you remember those crazy days, that was the exception to the rule.

Amazon and eBay both appeal to the discount shopper. However, goes one step better. While many people like the kinds of discounts Amazon and eBay provide -- much like how in the bricks-and-mortar world, Wal-Mart and Target are popular -- operates in many ways like those outlet malls so many people are attracted to (and, indeed, drive many, many miles for the subsequent deals).

Darn,'s a good idea for anyone who has, say, taken to the highway and driven a long distance to get to an outlet mall in the boonies, or braved Black Friday crowds to try to get some good deals on brand names before Christmas. (I've done both, and I personally don't find it pleasant.) In fact,'s motto is, "Your Online Outlet."

At any rate, though, while online outlet-shopping might be's niche, it certainly isn't resting there. No sir. Byrne & Co. have been nurturing an auction site, taking advantage of what many believe are recent missteps from auction giant eBay.

Ode to the numbers
It seems strange that many investors are so very excited about the potential of tech growth stories like Apple (NASDAQ:AAPL) or Google (NASDAQ:GOOG), while ignoring Overstock. If you look at Overstock since its inception, you'll see that many of the company's financial elements have been on an upward trajectory.

Although the company is still operating at a loss, it's been narrowing that loss for quite some time now, and the fourth quarter of 2004 was its first profitable quarter, with net income of $2.5 million or $0.12 per diluted share. Total sales increased 80%. It has also managed to keep itself in check when it comes to debt, a rather Foolish aspect to its corporate persona.

Although it is still expecting to report losses for the short term, in its most recent conference call Overstock CEO Byrne said that the company's beginning to work as he had envisioned. One could argue that previous euphoric sentiments are beginning to be realized, paving the way for sustained profitability and a killer brand like and eBay, but if you take the stock price into consideration, it appears nobody's noticed.

Margins have been increasing, although the company has recently said that it plans to let margins fall by the wayside for a while as it attempts to take on competitors. (That means selling stuff at lower prices in the hopes of selling more stuff.) The company has added several interesting elements to its "lowest price on Earth" motto -- including the aforementioned auctions and a service that allows you to build your own engagement ring, which brings to mind another Motley Fool Rule Breakers stock, Blue Nile (NASDAQ:NILE).

Meanwhile, the climate for online shopping continues to show that it's an increasingly accepted arm of retail. Recent data from the U.S. Department of Commerce showed that in the holiday quarter of 2004 (the fourth quarter), online sales increased 22% to $18.46 billion. In addition, Jupiter Research said that there were 17.7 million new online shoppers, and forecasts a 20% increase in online sales over the next year. Of course, higher rates of adoption for broadband Internet access and higher-speed computers also contribute to the increasingly rosy outlook for e-commerce.

Bio of a Rule Breaker
I know David Gardner has said more than once that one of the most important things he looks at when he's surveying a company is management. It's arguable that Overstock's CEO has quite a rule-breaking personality.

During the company's most recent conference call (longtime Fool contributor Bill Mann says he never misses it), there were more than 500 people on the line. If you were one of them, you'd see that this is a CEO who's made of a different cloth, one who's willing to see and do things entirely differently. Anyone who throws around phrases like, "The tools of Satan are among us. They are trying to ruin things," and, "We are building this ark and we built the ark, the wave came, we rode, the ark rode the waters magnificently," -- and describes hard-working employees as having "coughed up a lung," -- certainly isn't your run-of-the-mill leader. He's got some serious panache. He's also made it clear that he's willing to admit when he's wrong.

It's that frank outlook that's so appealing to those of us who have learned to look at corporate leaders with a whole lot of mistrust. As Bill Mann pointed out, Byrne has been willing to come right out and tell analysts that they were overly aggressive in their estimates. Check out this installment of last year's interview with Byrne on The Motley Fool Radio Show on NPR for more of his refreshing personality. A Fool likes this kind of moxie. He seems to love this company; it's his baby, and he's the visionary. A Fool likes that kind of moxie, too.

At any rate, it's for these reasons and more that David Gardner picked to be a Motley Fool Rule Breakers stock. Like Internet commerce leaders Amazon and eBay before it, seems poised to take advantage of many of the current trends at hand -- and likely take bloodthirsty and opportunistic advantage of weaknesses in its rivals. How's that for the art of war? And when there's a wave of opportunity cresting on the horizon, Rule Breakers are there.

For more Foolish reading on Overstock, check out these stories:

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Alyce Lomax does not own shares of any of the companies mentioned, although she has recently made her very first purchase. Buying anotherpair of Dr. Martens -- these are the hazards of researching a discount retailer. The Fool has a disclosure policy.