Never underestimate the power of eBay's(Nasdaq: EBAY) moneymaking lure. German police recently found a mailman who had been hoarding packages he was supposed to deliver so he could sell the goods on the auction site. He'd collected about $24,000 worth of items in his apartment until one irate postal costumer broke the case when he found a clarinet mouthpiece he'd purchased was for sale on eBay instead of delivered to his house.

Keep your eyes on the mail. And have a Foolish weekend!

In today's Motley Fool Take:

No More Mr. Softy

By Rick Aristotle Munarriz (TMF Edible)

Maybe so many investors are bent on finding the next Microsoft(Nasdaq: MSFT) because they got tired of waiting on the last one. Over the last four years, the software giant has seen its shares halved as antitrust lawsuits and cascading margins have kept investors away.

To put it bluntly, Mr. Softy got soft. It removed its teeth, placed them in a bedside glass, and started gnawing its gums on meager dividend payouts, suit settlements, and low-margin businesses.

But maybe Microsoft has more bite than the market gives it credit for. Last night, the company posted better-than-expected quarterly results. While earnings per share fell from $0.20 to just $0.12, revenues were 17% higher at $9.2 billion. And that was weighed down by stock compensation expenses, a European Commission fine, and a costly settlement with Sun Microsystems(Nasdaq: SUNW). Back out the legal hits -- but not the ongoing compensation charges -- and earnings would have been a heartier $0.29 a share.

As Microsoft's cash balance continues to grow and its clouded legal situation clears up, it may be time to take another look. Its subsidiary is profitable and growing nicely. That's not much of a surprise given the recent spurts at fellow online hubs Yahoo!(Nasdaq: YHOO) and Ask Jeeves(Nasdaq: ASKJ).

And yes, a 30% jump in Xbox video game console sales this quarter was a near-term hit on margins, but it will be worth it if it helps build a larger base of die-hard players who will be lapping up higher-margin software titles in the future.

While the company's flagship operating software is at the mercy of corporate spending budgets, and while Linux remains a pesky free alternative, Microsoft continues to grow. Moreover, it has positioned a number of dynamic product lines even as Wall Street was giving up on the company.

Just months from a new fiscal year, Microsoft is looking to earn roughly $1.17 a share on $38 billion in revenues in fiscal 2005. It's not every day that Microsoft fetches just over 20 times forward earnings. With the economy showing signs of life, online content bringing in the dollars, and the prospects for video game subscriptions and royalties growing, forget the fact that Microsoft is smiling these days.

Look! Closer! Microsoft's wearing teeth again!

Longtime Fool contributor Rick Aristotle Munarriz has been using Windows for ages but he does not own shares in any of the companies mentioned in this story.

Discussion Board of the Day: Microsoft

Do you think Microsoft is back or has it matured into a sleepy has-been? What will the company do with its more than $56 billion in greenbacks? All this and more -- in the Microsoft discussion board. Only on

Overstock Rides Again

By Jeff Hwang

When things are going good, things are going very good. Following stellar reports out of Internet stars Yahoo!(Nasdaq: YHOO) and eBay(Nasdaq: EBAY), Motley Fool Hidden Gems pick OSTK) chimed in, maintaining its own momentum.

For the first quarter, the online discounter reported gross bookings (formerly referred to as GMS or gross merchandise sales) up 79% to $93.4 million. Gross profit grew 83% to $8.5 million, far outpacing the 38% growth in administrative expenses and a 14% increase in sales and marketing expenses. That helped Overstock cut last year's $0.26 per-share loss to $0.14, or $2.2 million.

Absent from President Patrick Byrne's shareholder letter were the Lao Tse references from last quarter's "The rhythm of the Dao is like the drawing of a bow" letter. In its place was a brilliant SAT-worthy analogy explaining the relationship between the company's cash and inventory:

One can think of cash and inventory as a physicist thinks of mass and energy: One is a form of the other, and they can be managed so one turns into the other, and then back. Our practice has been to run cash low in the late summer by turning that cash into inventory: As Christmas approaches, we run the inventory down, turning it back into cash.

From where Byrne drew the inspiration for that, one can only guess. But it's such frank discussion of the business for the benefit of the average retail investor that makes this company so likeable.

It's apparent that Overstock is gaining momentum. On top of sales growth, margins are also expanding -- which is key to any investment thesis regarding the stock. And whether you believe Overstock is undervalued or that competitor AMZN) is overvalued -- or both -- one thing is certain: This gem is no longer hidden.

Fool contributor Jeff Hwang owns shares of both eBay and

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Floating Down the Amazon

By Alyce Lomax (TMF Lomax) (Nasdaq: AMZN) reported first-quarter numbers last night, with the same upbeat air that's been prevalent lately. However, investors took a hunk out of its share price today -- maybe they expected much more excitement. After all, love was in the air yesterday -- case in point: Rick Munarriz proposed marriage to eBay(Nasdaq: EBAY).

This is Amazon's third consecutive quarterly profit, once a questionable concept. Profits were up 41% as Amazon reported earnings of $111 million, or $0.26 per share, compared with a loss of $10 million, or $0.03 per share, last year. Without the boost of foreign currency exchange rates, Amazon would have racked up $0.21 per share in earnings; remove stock-based compensation and other costs and you'd have $0.23 per share.

Revenue grew to $1.53 billion from $1.08 billion, with $87 million in foreign currency benefits. Without such benefits, sales grew 33%. The company's forward outlook is pretty spiffy. Amazon sees revenues of $6.45 billion to $6.85 billion in 2004, up from its previous expectation of $6.2 billion to $6.7 billion in sales.

Regardless, there's still the argument that this stock is hopelessly overvalued. There's also concern about the company's shrinking gross margin, due to its discounting strategy and that free shipping perk that many of us Amazon shoppers love so much.

A Motley Fool Stock Advisor pick, Amazon has continued to become respectable, lumped into the same category as Internet heavyweights eBay and Yahoo!(Nasdaq: YHOO). However, it's more and more obvious that it is, in fact, a retailer, and a discounter at that.

Add to that Amazon's announcement yesterday that it's planning a jewelry store. That will line it up to compete with other purveyors of online bling, including Tiffany(NYSE: TIF) and Motley Fool Hidden Gems pick RedEnvelope(Nasdaq: REDE). Normally, I might question that move -- but gee, I've ordered a vacuum cleaner, of all things, from Amazon in the past, so far be it for me to say that'll never work.

If anything about the current climate speaks well for Amazonian potential, other than a newly energized consumer with a healing line of credit (Fools, of course, control their credit impulses), it would be the sizzling rate of broadband adoption reported this week. With a high-speed connection, online shopping's like driving to the store, with no traffic, prime parking, an empty checkout line, and a really efficient cashier.

Although investors snubbed Amazon this morning, I certainly wouldn't discount the powers of this discounter, not yet. Is it a cheap stock? It's hard to make that argument. Is it going to keep growing, innovating, and tempting our pocketbooks? Oh, heck yeah. If Rick can admit his feelings, I'll step up my own: I've always had a crush on Amazon. But it's still a little difficult for me to commit.

Alyce Lomax does not own shares of any of the companies mentioned. She's spent the last couple days fascinated with Amazon's new search and e-commerce project, (where, for some inexplicable reason, she first keyed up "Buck Rogers" as a test search).

Qu ote of Note

"The capacity of human beings to bore one another seems to be vastly greater than that of any other animal." -- H.L. Mencken

Mo re on Today

Think we're in a new bull market? Matt Richey says, "Think again." Find out more in Bull's Eye Investing.... While other biotechs have soared, Trimeris has paid for too-high expectations for its HIV drug therapy. What's the damage? Charly Travers has more in A Difficult Drug Launch.... Disney may have lost the keys to quality, but the spares aren't too far away. Rick Munarriz is leading the charge for a turnaround in Saving Disney's World.

In other news:

For a list of all our stories from today, see our Today's Headlines page.