The firms advise investors to arrive at their investment decision after evaluating the following issues:Key Positive ArgumentsKey Negative ArgumentsAMZN has a healthy balance sheet that provides flexibility for growth, acquisitions, and share buybacks. AMZN is a Company uniquely positioned to benefit from the continued shift in commerce from offline to online.The Company is leveraged to two of the fastest growing platforms on the Internet, online search, and the Chinese e-Commerce market.The availability of Prime (membership program with fast shipping), coupled with an ever larger selection and 3rd party sales, is driving accelerated growth in the US.Prime is becoming an increasingly meaningful part of AMZN's growth, demonstrated by acceleration in EGM and Media categories.AMZN will continue to scale its international operations through the rollout of Prime and additional categories.Going forward, AMZN's margin expansion could be affected due to the following reasons: 1) aggressive pricing & shipping promotion requirements due to increased competition, especially from multi-channel retailers 2) gross margin pressure, attributable to the shift away from higher-margin Media sales, especially with the growth in digital music/video distribution channels 3) rising online advertising costs and 4) the likely end of margin boosts from 3rd party sales.Short-term variability in revenue growth and profitability can create significant volatility in shares.Amazon.com continues to be vulnerable to forex volatility in the Euro, Pound, Yen, and Canadian dollar currencies.Despite its strong competitive position, AMZN faces tough competition from other big Internet players such as Yahoo!, eBay, and Microsoft.Based in Seattle, Washington, Amazon.com, Inc. (AMZN) is the world's leading online merchandiser with over 60 million active customers in over 220 countries. The Company, which began as a bookseller in 1995, now sells a wide range of products through its online stores as well as through partnerships (and co-branded sites) with online and traditional retailers. It operates websites in the U.S., Canada, the U.K., Germany, France, China, and Japan. AMZN was one of the first to begin online selling, setting a benchmark in the retail industry. AMZN operates websites that sell various products and services, which primarily include apparel, shoes, and accessories health and personal care baby care products books camera and photography and consumer electronics. Amazon Prime is a membership program that gives fast shipping of purchases. The Company and its affiliates operate web sites under its own name and the Joyo Amazon websites at http://www.joyo.cn and http://www.amazon.cn. It also operates http://www.a9.com and http://www.alexa.com that enable search and navigation, and http://www.imdb.com, a movie database web site. More Information can be obtained from the website, www.amazon.com. AMZN's fiscal year coincides with the calendar year.February 11, 2009