Amazon.com
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| Amazon.com, Inc. | |
|---|---|
 | |
| Type | Public (NASDAQ: AMZN) |
| Founded | 1994 |
| Headquarters | Seattle, Washington, United States |
| Key people | Jeff Bezos, founder, president, CEO, chairman Rick Dalzell, senior VP/CIO Tom Szkutak, senior VP/CFO Werner Vogels, VP/CTO |
| Industry | Retail |
| Products | Amazon.com A9.com Alexa Internet IMDb |
| Revenue |  US$10.71 billion (2006) |
| Net income | US$190 million (2006) |
| Employees | 13,900 (2006) |
| Slogan | "…and you're done" |
| Website | www.amazon.com |
| Alexa rank | <40 |
| Type of site | e-commerce |
| Advertising | web banners & videos |
| Available language(s) | English, Chinese, French, German, Japanese |
| Launched | 1995 |
Amazon.com, Inc. (NASDAQ: AMZN) is an American e-commerce company based in Seattle, Washington. It was one of the first major companies to sell goods over the Internet and was one of the iconic stocks of the late 1990s dot-com bubble. After the bubble burst, Amazon faced skepticism about its business model, but it made its first annual profit in 2003.
Founded by Jeff Bezos in 1994, and launched in 1995, Amazon.com began as an online bookstore but soon diversified its product lines by adding VHSs, DVDs, music CDs, MP3s, computer software, video games, electronics, apparel, furniture, food, toys, and more.
Amazon has established separate websites in Canada, the United Kingdom, Germany, Austria, France, China, and Japan. It ships globally on selected products.
Contents |
History and business model
Amazon was founded in 1994, spurred by what Bezos refers to as his "regret minimization framework," i.e. his effort to fend off late-in-life regret for not staking a claim in the Internet gold rush.[1] It is common lore that Bezos wrote its business plan while he and his wife drove a 1988 Chevrolet Blazer from Fort Worth, Texas to Bellevue, Washington[2], although this story is largely apocryphal according to early employees of the company.[original research?]
The company began operating as an online bookstore under the name Cadabra.com (as in abracadabra), a name that Bezos quickly abandoned due to its sounding like "cadaver".[2] While the largest brick-and-mortar bookstores and mail-order catalogs for books might offer 200,000 titles, an online bookstore could offer many times more. Bezos renamed his company "Amazon" after the world's most voluminous river.
The company was incorporated in 1994, in the state of Washington, began service in July 1995, and was reincorporated in 1996 in Delaware. The first book ever sold by Amazon.com was Douglas Hofstadter's Fluid Concepts and Creative Analogies: Computer Models of the Fundamental Mechanisms of Thought.[3] Amazon.com had its initial public offering on May 15, 1997, trading on the NASDAQ stock exchange under the symbol AMZN at an IPO price of US$18.00 per share (equivalent to US$1.50 after three stock splits during the late 1990s).
Amazon's initial business plan was unusual: the company did not expect to turn a profit for four to five years. In retrospect, the strategy was effective. Amazon grew at a steady pace in the late 1990s while many other Internet companies grew at a blindingly fast pace.
Amazon's "slow" growth caused a number of its stockholders to complain, saying that the company was not reaching profitability fast enough. When the Dot-com bubble burst and many e-companies went out of business, Amazon persevered and finally turned its first profit in the fourth quarter of 2002: a meager US$5 million, just 1¢ per share, on revenues of over US$1 billion, but it was important symbolically.
The firm has since remained profitable: net income was US$35.3 million in 2003, US$588.5 million in 2004, US$359 million in 2005, and US$190 million in 2006 (including a US$662 million charge on R&D in 2006). Nevertheless, the firm's cumulative profits remain negative. As of September 2007, the accumulated deficit stood at US$1.58 billion.
Revenue continued to grow thanks to product diversification and international presence: US$3.9 billion in 2002, US$5.3 billion in 2003, US$6.9 billion in 2004, US$8.5 billion in 2005, and US$10.7 billion in 2006. On November 21, 2005, Amazon entered the S&P 500 index, replacing AT&T after it merged with SBC Communications.
Time Magazine named Bezos its 1999 Person of the Year in recognition of the company's success in popularizing online shopping.
Merchant partnerships
The Web sites of Borders (borders.com, borders.co.uk), Waldenbooks (waldenbooks.com), Virgin Megastores (virginmega.com), CDNOW (cdnow.com), and HMV (hmv.com) are powered and hosted by Amazon. Until June 30, 2006, typing ToysRUs.com into a browser would similarly bring up Amazon.com's Toys & Games tab; however, this relationship was terminated as the result of a lawsuit.[4]
Amazon.com powers and operates retail web sites for Target, the NBA, Sears Canada, Sears UK, Benefit Cosmetics, Bebe Stores, Timex Corporation, Marks & Spencer, Mothercare, Lacoste and Bombay Company (now defunct). For a growing number of enterprise clients, currently including the UK merchants Marks & Spencer and Mothercare, Amazon provides a unified multichannel platform from whence a customer can interchangeably interact with the retail website, standalone in-store terminals, and phone-based customer service agents.
It also powers AOL's Shop@AOL service via Web Services technology.
Locations
Headquarters
The company's global headquarters is located on Seattle, Washington's Beacon Hill. It has offices throughout other parts of greater Seattle including Union Station and The Columbia Center.
Amazon has announced plans to move its headquarters to the South Lake Union neighborhood of Seattle beginning in mid-2010, with full occupancy by 2011. This move will consolidate all Seattle employees onto the new 11-building campus.
Software development centers
The company employs software developers in modest- to large-sized centers across the globe. International locations include:
- Slough (England)
- Edinburgh (Scotland)
- Bangalore, Chennai, and Hyderabad (India)
- Cape Town (South Africa)
- Iaşi (Romania)
- Shibuya (Tokyo, Japan) (closed in 2005)
- Beijing (China).
Fulfillment and warehousing
Fulfillment centers are located in the following cities, often near airports:
- North America:
-
- Arizona, USA: Phoenix
- Delaware, USA: New Castle
- Kansas, USA: Coffeyville
- Kentucky, USA: Campbellsville, Hebron (near CVG), and Lexington
- Massachusetts, USA: Springfield (new as of early 2007)
- Nevada, USA: Fernley and Red Rock (near 4SD)
- Washington, USA: Federal Way
- Pennsylvania, USA: Chambersburg, Carlisle, and Lewisberry
- Texas, USA: Dallas/Fort Worth
- Ontario, Canada: Mississauga (a Canada Post facility; see Canadian operations below)
- Europe:
-
- Munster, Republic of Ireland: Cork
- Bedfordshire, England, UK: Marston Gate
- Inverclyde, Scotland, UK: Gourock
- Fife, Scotland, UK: Glenrothes
- Swansea, Wales, UK: Jersey Marina (Under construction)
- Loiret, France: Orléans-Boigny (2000),
- Loiret, France: Orléans-Saran (2007),
- Hesse, Germany: Bad Hersfeld
- Saxony, Germany: Leipzig
- Asia:
Product lines
Amazon has steadily branched into retail sales of music CDs, videotapes and DVDs, software, consumer electronics, kitchen items, tools, lawn and garden items, toys & games, baby products, apparel, sporting goods, gourmet food, jewelry, watches, health and personal-care items, beauty products, musical instruments, industrial & scientific supplies, groceries, and more.
The company launched Amazon.com Auctions, its own Web auctions service, in March 1999. However it failed to chip away at industry pioneer eBay's juggernaut growth. Amazon Auctions was followed by the launch of a fixed-price marketplace business called zShops in September 1999, and a failed Sotheby's/Amazon partnership called sothebys.amazon.com in November. Although zShops failed to live up to its expectations, it laid the groundwork for the hugely successful Amazon Marketplace service launched in 2001 that let customers sell used books, CDs, DVDs, and other products alongside new items. Amazon Marketplace's main rival today is eBay's Half.com service.
Beginning August 2005[5], Amazon began selling products under its own private label, "Pinzon"; the initial trademark applications suggested the company intended to focus on textiles, kitchen utensils, and other household goods.[5] In March 2007, the company applied to expand the trademark to cover a larger and more diverse list of goods, and to register a new design consisting of the "word PINZON in stylized letters with a notched letter O whose space appears at the "one o'clock" position."[6]. The list of products registered for coverage by the trademark grew to include items such as paints, carpets, wallpaper, hair accessories, clothing, footwear, headgear, cleaning products, and jewelry.[6]
On May 16, 2007 Amazon announced its intention to launch its own online music store.[7] The store launched in public beta September 25, 2007, selling downloads exclusively in MP3 format without digital rights management.[8].
In August 2007, Amazon announced Amazon Fresh, a grocery service offering perishable and nonperishable foods. Customers can pick up orders or have them delivered to their homes. Delivery was initially restricted to residents of Mercer Island, Washington, a wealthy suburb of Seattle.[9] Pickup locations were later added in the suburbs of Bellevue and Kirkland, and delivery coverage was expanded to several ZIP codes in Seattle.
Website
A popular feature of Amazon is the ability for users to submit reviews to the web page of each product. As part of their review, users must rate the product on a rating scale from one to five stars. Such rating scales provide a basic idea of the popularity and dependability of a product.
The review feature is an important and highly influential function for customers and one of the main reasons for amazon.com’s success at selling books. As with book reviews anywhere, the buyer must beware that all reviewers have bias. Under normal circumstances, reviews give the reader at least a modest basis for evaluating a given book.
Because it is an open forum, the reader can benefit from a variety of perspectives. However, the anonymity of web reviewers increases the chances of abuse in the form of self-praise, praise from friends, or malicious criticism. This situation was confirmed in 2004 when the origin of reviews was accidentally made public on an amazon site, and some authors openly confirmed their glowing reviews of their own books.
Amazon provides an optional badging option for reviewers, e.g., to indicate the “real name” of the reviewer (based on a credit card) or to indicate that the reviewer is one of the “top” (most popular) reviewers. Some books have well over one thousand reviews (e.g. Ayn Rand’s Atlas Shrugged), but many books, especially new ones, have none.
The U.S. site generally has the most reviews, but other country sites offer the perspectives of other reviewers. A review posted on one site is not necessarily visible on another site.
Search Inside the Book is a feature which allows customers to search for keywords in the full text of many books in the catalog.[10][11] The feature started with 120,000 titles (or 33 million pages of text) on October 23, 2003. There are currently about 250,000 books in the program. Amazon has cooperated with around 130 publishers to allow users to perform these searches.
To avoid copyright violations, Amazon.com does not return the computer-readable text of the book but rather a picture of the matching page, disables printing, and puts limits on the number of pages in a book a single user can access. One author observed that his entire book could be read online by searching a few words[12]. Amazon is planning to launch Search Inside the Book internationally. Additionally, customers can purchase access to the entire book online via the Amazon Upgrade program, although the selection of books eligible for this service is currently limited.
According to information in Amazon.com discussion forums, Amazon derives about 40% of its sales from affiliates, whom they call "Associates." An Associate is an independent seller or business that receives a commission for referring customers to the Amazon.com site.
Associates do this by placing links on their websites to the Amazon homepage or to specific products. If a referral results in a sale, the Associate receives a commission from Amazon. Worldwide, Amazon has "over 900,000 members" in its affiliate programs.[13] Associates can access the Amazon catalog directly on their websites by using the Amazon Web Services (AWS) XML service.
Amazon was one of the first online businesses to set up an affiliate marketing program.[14] AStore is a new affiliate product that allows Associates to embedded a subset of Amazon products within, or linked to from, another website.
According to the Internet audience measurement website Compete.com, Amazon attracts approximately 50 million U.S. consumers to its website on a monthly basis.[15]
Acquisitions and spinoffs
- In April 1998, Amazon bought the Internet Movie Database (IMDb).
- In August 1998, Amazon bought Cambridge, Massachusetts-based PlanetAll for 800,000 shares of Amazon stock. PlanetAll operated a web-based address book, calendar, and reminder service. In the same deal, Amazon acquired Sunnyvale-based Junglee, an XML-based data mining startup for 1.6 million shares of Amazon stock. The two deals together were valued at about US$280 million at the time.
- In June 1999, Amazon bought Alexa Internet, Accept.com and Exchange.com in a set of stock deals worth approximately US$645 million.
- In 2004, Amazon purchased Joyo.com, a Chinese e-commerce website. It also debuted A9, a company focused on researching and building innovative technology.
- In March 2005, Amazon acquired BookSurge, a print on demand company, and Mobipocket.com, an eBook software company.
- In July 2005, Amazon purchased CreateSpace (formerly CustomFlix), a Scotts Valley, CA-based distributor of on-demand DVDs.[16] Since the acquisition, CreateSpace has expanded its on-line services to include on-demand books and CDs, as well as video downloads. On July 30, 2007, the National Archives announced that it would make thousands of historic films available for purchase through CreateSpace.[17]
- In February 2006, Amazon acquired Shopbop, a Madison, Wisconsin-based retailer of designer clothing and accessories for women.[18]
- In May 2007, Amazon acquired dpreview.com, a London-based digital photography review website created by Phil Askey as his personal hobby website and Brilliance Audio, the largest independent publisher of audiobooks in the United States.[19]
Noteworthy events
In 2002, Amazon became the exclusive retailer for the much-hyped Segway Human Transporter. Bezos was an early supporter of the Segway before its details were made public.
In 2003, Amazon purchased the rival online music retalier CD Now, which was founded in 1994.
On June 21, 2003, Amazon coordinated what was at the time one of the largest sales and distribution events in e-commerce history with the sale of over 1.3 million copies of Harry Potter and the Order of the Phoenix, since beaten by Harry Potter and the Deathly Hallows with a sale of over 2 million copies preordered in 2007.
On July 16, 2005, Amazon celebrated its 10th anniversary by telecasting a worldwide live concert hosted by Bill Maher and artists such as Bob Dylan and Norah Jones.
On December 13, 2007, Amazon paid £1,950,000 for a hand written copy of The Tales of Beedle the Bard by J. K. Rowling.
Products and services
 | This article or section may contain original research or unverified claims. Please improve the article by adding references. See the talk page for details. (January 2008) |
Amazon.com has incorporated a number of products and services into its shopping model, either through development or acquisition.
2001
- Honor System and donations
- The Honor System was originally launched in 2001 to allow customers to make donations or buy digital content, with Amazon collecting 2.9 percent of the payment plus a flat fee of US$.30.
2002
- Web Services
- Amazon launched Amazon Web Services (AWS) in 2002. The service provides programmatic access to many features leveraged behind the scenes on its website.
2004
Amazon also created "channels" to benefit certain causes. In 2004, Amazon's "Presidential Candidates" allowed customers to donate US$5-200 to the campaigns of 2004 U.S. presidential hopefuls. Amazon has periodically reactivated a Red Cross donation channel after such tragedies as 9/11 and Hurricane Katrina. After the 2004 earthquake and tsunami in the Indian Ocean, Amazon set up an online donation channel to the American Red Cross, waiving its processing fee. As of January 2005, over 162,000 individuals had donated over US$13.1 million.[citation needed] Similar channels were set up for the British, Canadian, French, German and Japanese Red Cross organizations. Over 7,000 Britons donated more than US$350,000; 900 Canadians over US$56,000; 660 French over US$23,000; 2,900 Germans over US$145,000; and 1,900 Japanese over US$66,000.[citation needed]
2005
- Prime
- Amazon Prime offers customers free 2-day and discounted priority shipping for a yearly fee of $79 USD. Amazon launched the program in the continental United States in 2005, Japan in June 2007 and the United Kingdom and Germany in November 2007.
- Shorts
- Launched in 2005, Amazon Shorts offers exclusive short form content, including short stories and non-fiction pieces from best-selling authors, all available for immediate download at US$.49. As of June 2007, the program has over 1,700 pieces and is adding about 50 new pieces per week.
- Mechanical Turk
- In November 2005, Amazon.com began testing Amazon Mechanical Turk, an application programming interface (API) allowing programs to dispatch tasks to human processors.
2006
- S3
- In March 2006, Amazon launched an online storage service called Amazon Simple Storage Service (Amazon S3). An unlimited number of data objects, from 1 byte to 5 gigabytes in size, can be stored in S3 and distributed via HTTP or BitTorrent. The service charges monthly fees for data stored and for data transferred.
- Discussion boards
- In August 2006, Amazon launched product wikis (later folded into Amapedia) and discussion forums for certain products using guidelines that follow standard message board conventions.
- EC2
- In August 2006, Amazon introduced Amazon Elastic Compute Cloud (Amazon EC2), a virtual site farm, allowing users to use the Amazon infrastructure with its high reliability to run diverse applications ranging from running simulations to web hosting.
2007
- Amapedia
- In January 2007 Amazon launched Amapedia, a collaborative wiki for user-generated content to replace ProductWiki.
- Unbox
- In March 2007, Amazon launched an online video on demand service, which has been criticized for its use of digital rights management (DRM).[citation needed]
- MP3 downloads
- In September 2007, Amazon launched a new music store (currently in beta) called Amazon MP3, which sells downloadable tracks, all in the MP3 format and most recorded at 256 kilobits per second variable bitrate (VBR).[20] Amazon's terms of use agreements legally restrict use of the music, but Amazon does not use DRM to enforce those terms.[citation needed]
- Amazon MP3 is selling music from the Big 4 record labels, EMI, Universal, Warner Music, and Sony BMG, as well as many independents; as of January 2008 they are the only store to sell DRM-free music from all Big 4 labels.[21][22][23][24] Previous to the launch of this service, Amazon made an investment in Amie Street, a similar music store with a variable pricing model based on demand.[25]
- Vine
- In August 2007 Amazon launched Amazon Vine, which allows top product reviewers free access to pre-release products from vendors participating in the program.
- FPS
- In August 2007 Amazon launched a payment service specifically targeted at developers. Amazon FPS has facilities for developing many different charging models including micro-payments. The service also gives developers easy access to Amazon customers.
- Kindle
- In November 2007, Amazon launched Amazon Kindle, an e-book reader which downloads content over "Whispernet," a free EV-DO wireless service on the Sprint Nextel network. Initial offerings include approximately 90,000 books, newspapers, magazines and blogs. The screen uses E Ink technology to reduce battery consumption.
- SimpleDB
- In December 2007, Amazon introduced SimpleDB, a database system, allowing users of its other infrastructure to utilize a high reliability high performance database system.
Undated
- Connect
- Amazon Connect enables authors to post remarks on their book pages and to customers who have bought their books.
- WebStore
- WebStore by Amazon allows businesses to create e-commerce websites using Amazon technology. Merchants can customize their sites using their own photos and branding. Sellers pay a commission of 7 percent, which includes credit-card processing fees and fraud protection, and a subscription fee of $59.95/month for an unlimited number of webstores and listings.
Controversies
Trademark infringement
In 1999 the Amazon Bookstore Cooperative of Minneapolis, Minnesota sued Amazon.com for trademark infringement. The cooperative had been using the name "Amazon" since 1970, but reached an out-of-court agreement to share the name with the on-line retailer.[26]
Patent use
The company has been controversial for its alleged use of patents as a competitive hindrance. The "1-click patent"[27] is perhaps the best-known example of this. Amazon's use of the one-click patent against competitor Barnes and Noble's website led the Free Software Foundation to announce a boycott on Amazon in December 1999.[28] The boycott was discontinued in September 2002.[29]
On May 12, 2006, the USPTO ordered a reexamination[30] of the "One-Click" patent, based on a request filed by Peter Calveley, who cited as prior art an earlier e-commerce patent and the Digicash electronic cash system.[31]
On February 22, 2000, the company was granted a patent covering an internet-based customer referral system, or what is commonly called an "affiliate program". Reaction was swift and negative. Industry leaders Tim O'Reilly and Charlie Jackson spoke out against the patent,[32] and O'Reilly published an open letter[33] to Bezos protesting the 1-click patent and the affiliate program patent, and petitioning him to "avoid any attempts to limit the further development of internet commerce".
O'Reilly collected 10,000 signatures[34] with this petition. Bezos responded with his own open letter.[35] The protest ended with O'Reilly and Bezos visiting Washington D.C. to lobby for patent reform.
On February 25, 2003, the company was granted a patent titled "Method and system for conducting a discussion relating to an item on Internet discussion boards".[36]
Canadian operations
Amazon has a Canadian site in both English and French, but is prevented from operating any headquarters, servers, fulfillment centers or call centers in Canada due to that country's legal restrictions on foreign-owned booksellers. Instead, Amazon's Canadian site originates in the United States, and Amazon has an agreement with Canada Post to handle distribution within Canada and for the use of the Crown corporation's Mississauga, Ontario shipping facility.[37] The launch of Amazon.ca generated controversy in Canada. In 2002, the Canadian Booksellers Association and Indigo Books and Music sought a court ruling that Amazon's partnership with Canada Post represented an attempt to circumvent Canadian law,[38] but the litigation was dropped in 2004.[39]
Customer service
Amazon.com does not publish its toll-free customer service number (+1-800-201-7575) on its own web site. Customers are instead asked to submit written service requests (which are answered by e-mail) or to use a click-to-call service to be connected by phone to an available service representative.[40]
There are numerous Web pages that exist solely to publish the Amazon.com customer service phone numbers, one of which received in excess of 23,000 visits in December 2004 alone.[41] Despite the perceived difficulty in reaching customer service by phone, Amazon.com earned an 87% rating for customer service in the Q4 2006 American Customer Satisfaction Index, second only to barnesandnoble.com llc which earned an 88% rating.[42]
Labor relations
Some employees of Amazon in the United Kingdom are required to submit to drug tests and can have their employment terminated on a positive test. However, the reliability of the tests has been called into question, as in the case of an Amazon worker who won a tribunal case against the company.
The Humane Society of the United States v. Amazon.com, Inc., et al
Amazon continues to carry two cockfighting magazines and two dog fighting videos although the Humane Society of the United States (HSUS) contends that the sale of these materials is a violation of U.S. Federal law. The Humane Society of the United States has filed a lawsuit against Amazon.[43] A campaign to boycott Amazon purchases gained momentum in August 2007 after the much publicized dog fighting case involving NFL quarterback Michael Vick.[44]
Reader reviews credibility
A 2004 glitch in Amazon.ca's review system revealed that many well-established authors were anonymously giving themselves glowing reviews, with some revealed to be anonymously giving "rival" authors terrible reviews. The glitch in the system was fixed and those reviews have since been removed or made anonymous.[45][46]
Easter eggs
Two easter eggs exist on Amazon.com's website. They are reached by invisible links at the center of the page below the last line of text.
- An invisible link at the very bottom of the "Directory of All Stores" page leads to a February 2002 tribute to David Risher, "Amazon.com's favorite site surfer".
- At the very bottom of Amazon.com's Sports & Outdoors store, an invisible link leads to a November 2007 tribute to retiring Chief Information Officer Rick Dalzell, "Amazon.com's favorite fisherman."
Additionally, at the bottom of the source code for each page the word 'MEOW' is written in a comment.
Amazon cloud
"Amazon Cloud" refers to the online retailer's delivery and storage of online digital media and their digital rights management system to its consumers from Amazon's servers.
Information stored on the Cloud is that such as eBook purchases made from the Amazon Kindle, which relies on Digital Rights Management (DRM). The storage of each customer's DRM allows him or her to have an online archive of all purchases.
Amazon dot com commercial
