Lehman analyst Douglas Anmuth downgraded NILE amidst fear that Amazon would soon be entering their space.
Anmuth feels that the more likely scenario would be a standalone Online Diamond Store for Amazon.com.
They are already doing a significant business in Jewelry.
Either way, the market is ripe for more competition. One thing none of these stories seems to discuss much is the fact that the vast majority of merchandise is never even seen by the online Diamond Merchants, which reduces the barrier to entry.