INTRODUCTION

In a world where anyone can purchase just about anything online, it can be
difficult to start and maintain a business selling goods online. Media such as
CDs, books, and movies is a common ware being sold on the Internet. Over
the last decade, online stores have come and gone so often, many people
scoff at their inception. But Amazon.com is not such a company. It is one of
the largest Internet sellers of media in the world today, and has expanded
its selections to include clothing, beauty products, house wares, and
thousands of other items.
Jeff Bezos founded Amazon.com in 1994. Originally the business was based
out of his garage in his Bellevue, Washington home. A businessman by the
name of Nick Hanauer believed in Bezos’ idea and decided to invest $40,000
in the venture. When Amazon first decided to go online, its layout was not as
flashy as it is today. In fact, the site looked very plain and unattractive to
most visitors, causing the business to start out on shaky ground. A man by
the name of Tom Alburg decided to invest $100,000 in Amazon in 1995,
which helped the company fund a better looking website and hosting
capabilities. When people began purchasing books from Amazon, Bezos was
in awe that he had customers from all over the country, not just Washington
State, purchasing books.

Bezos decided that he had to create more than just a bookstore if he wanted
people to come back as customers. He added the option of buyers to write
their own book reviews, which is a huge credit to Amazon.com’s success.
People began to look at Amazon as more of an online community and not
just a place to purchase things. By 1997, Amazon.com had generated $15.7
million in revenue. Once the company went public the same year, they
decided to add CDs and movies to the website. In 1998, Amazon added
some new items to the roster: software, electronics, video games, toys, and
home improvement items. Once the company began showing signs of
success, people became skeptic and claimed that Amazon was getting too
large in too short an amount of time.

At the end of 1999, Amazon had raked in over a billion dollars in sales. It
seemed as though the profit would never cease. However, in 2001, Amazon
reported a fiscal loss of $1.4 billion, and had laid off over 200 workers in the
last year. The beginning of 2001 found Amazon laying off even more
workers, totaling over 1000. Instead of giving up, Bezos had an idea: recruit
other companies to sell their products online through Amazon as well. The
idea worked. Companies such as Target, Toys R Us, Old Navy, and many
others have agreed to sell their items through Amazon. Although Amazon is
not directly responsible for inventory through these companies, they do get
part of the sales, creating a profit for all involved. Since the inception of the
idea, Amazon is now back on its feet and remains one of the most popular
online vendors in the world today.

AMAZON.Inc is an American-based multinational electronic commerce

company. Headquartered in Seattle, Washington, it is America's largest
online retailer, with nearly three times the Internet sales revenue of the
runner up, Staples, Inc.

Jeff Bezos founded Amazon.com, Inc. in 1994 and launched it online in

1995. It started as an on-line bookstore but soon diversified to product lines
of VHS, DVD, music CDs and MP3s, computer software, video games,
electronics, apparel, furniture, food, toys, etc. Amazon has established
separate websites in Canada, the United Kingdom, Germany, France, Japan,
and China. It also provides international shipping to certain countries for
some of its products.

On January 15, 2009, a survey published by Verdict Research found that

Amazon was the UK's favorite music and video retailer, and came third in
overall retail rankings.

Amazon's initial business plan was unusual: the company did not expect a
profit for four to five years; the strategy was effective. Amazon grew
steadily in the late 1990s while other Internet companies grew blindingly
fast. Amazon's "slow" growth provoked stockholder complaints: 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 2001:
$5 million, just 1¢ per share, on revenues of more than $1 billion, but the
profit was symbolically important.

The company remains profitable: net income was $35.3 million in 2003,
$588.50 million in 2004, $359 million in 2005, and $190 million in 2006
(including a $662 million charge for R&D in 2006), nevertheless, the firm's
cumulative profits remain negative. As of September 2007, the accumulated
deficit stood at $1.58 billion. Revenues increased thanks to product
diversification and an international presence: $3.9 billion in 2002, $5.3
billion in 2003, $6.9 billion in 2004, $8.5 billion in 2005, and $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. On December 31, 2008, Amazon
entered the S&P 100 index, replacing Merrill Lynch after it was taken over by
Bank of America.

In 1999, Time magazine named Bezos Person of the Year, recognizing the
company's success in popularizing on-line shopping.

Merchant partnerships
The Web site CDNOW (cdnow.com) is 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.[10]

Amazon.com powers and operates retail web sites for Target, Sears Canada,
Benefit Cosmetics, bebe Stores, Timex Corporation, Marks & Spencer,
Mother care, and Lacoste. For a growing number of enterprise clients,
currently including the UK merchants Marks & Spencer, Benefit Cosmetics'
UK entity and Mother care, Amazon provides a unified multichannel platform
whereby a customer can interchangeably interact with the retail website,
standalone in-store terminals, and phone-based customer service agents.
Amazon Web Services also powers AOL's Shop@AOL.

Locations
Amazon.com has offices, fulfillment centers, customer service centers and
software development centers across North America, Latin America, Europe
and Asia.
Headquarters

Amazon.com's headquarters in the PacMed building in Beacon Hill, Seattle.

The company's global headquarters is located on Seattle'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.

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, clothing, 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.

Amazon no longer mentions either Auctions or zShops on its main pages and
the help page for sellers now only mentions the Marketplace. Old links to
zShops now simply redirect to the Amazon home page, while old links to
Auctions take users to a transactions history page. New product listings are
no longer possible for either service.
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. Today, Amazon Marketplace's main rival is eBay's Half.com service.

Beginning August 2005, 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. 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." 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. On September 2008, Amazon filed to have
the name registered. While the USPTO has finished its review of the
application, Amazon has yet to receive an official registration for the name.

On May 16, 2007 Amazon announced its intention to launch Amazon MP3, its
own online music store. The store launched in the US in public beta
September 25, 2007, selling downloads exclusively in MP3 format without
digital rights management. This is especially notable as it was the first online
offering of DRM-free music from all four major record companies.

In August 2007, Amazon announced AmazonFresh, a grocery service

offering perishable and nonperishable foods. Customers can have orders
delivered to their homes at dawn or during a specified daytime window.
Delivery was initially restricted to residents of Mercer Island, Washington,
and was later expanded to several ZIP codes in Seattle proper. AmazonFresh
also operated pick-up locations in the suburbs of Bellevue and Kirkland from
summer 2007 through early 2008.

In 2008 Amazon expanded into film production and is currently funding the
film The Stolen Child with 20th Century Fox.

Review and recommendation

feature
Amazon.com's customer reviews are monitored for all negative or indecent
comments that are directed at anything, or anyone, but the product itself. In
regards to the reviews lacking relative restrictions, Robert Spector, who is
the author of the book Amazon.com, describes how "when publishers and
authors asked Bezos why Amazon.com would publish negative reviews, he
defended the practice by claiming that Amazon.com was ‘taking a different
approach...we want to make every book available – the good, the bad, and
the ugly...to let truth loose’" (Spector 132).

Reviews for different media of the same product are grouped together (e.g.,
the review page for a particular film, whether on VHS, Blu-Ray, or DVD, will
feature reviews from all three products). Currently, there is no way to only
look at reviews for one version of a product.

Website
The domain amazon.com attracted at least 615 million visitors annually by
2008 according to a Compete.com survey. This was twice the numbers of
walmart.com.

Amazon allows 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. In 2004 a software error accidentally showed the names behind
reviews that were submitted anonymously, and some authors were shown to
have written glowing reviews of their own books. Amazon created a feature
in recent years that allowed users to comment on reviews. Amazon provides
an optional badging option for reviewers, e.g., to indicate the real name of
the reviewer (based on confirmation of a credit card account) or to indicate
that the reviewer is one of the top reviewers by popularity. The U.S. site
generally has the most reviews. 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. 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. Additionally, customers can purchase online access
to the some books via the "Amazon Upgrade" program, although the
selection is currently quite limited.
According to information in Amazon.com discussion forums,[citation needed]
Amazon derives about 40 percent of its sales from affiliates whom they call
Associates, and third party sellers who list and sell products on the Amazon
websites. Associates receive a commission for referring customers to
Amazon 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. Associates can access the Amazon catalog directly
on their websites by using the Amazon Web Services (AWS) XML service. A
new affiliate product, aStore, allows Associates to embed a subset of
Amazon products within, or linked to from, another website.

Amazon reported over 1.3 million sellers sold products through Amazon's
World Wide Web sites in 2007. Selling on Amazon has become more popular
as Amazon expanded into a variety of categories beyond media and built a
variety of features to support volume selling. Unlike eBay, Amazon sellers do
not have to maintain separate payment accounts; all payments and payment
security are handled by Amazon itself.

According to the Internet audience measurement website Compete.com,

Amazon attracts approximately 50 million U.S. consumers to its website on a
monthly basis.

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.com, an XML-based
data mining startup for 1.6 million shares of Amazon stock. The two
deals together were valued at about $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 $645
million.
 In 2003, Amazon purchased the rival online music retailer CD Now.
 In 2004, Amazon purchased Joyo.com, a Chinese e-commerce
website. It also debuted A9.com, 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.com (formerly
CustomFlix), a Scotts Valley, California-based distributor of on-demand
 DVDs. Since the acquisition, Create Space 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
Create Space.
 In February 2006, Amazon acquired Shopbop, a Madison, Wisconsin-
based retailer of designer clothing and accessories for women.
 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.
 In January 2007 created Endless.com, a separate e-commerce brand
focusing on shoes.
 In January 2008, Amazon announced that it would acquire audiobook
provider Audible.com for $300 million in cash.
 In June 2008, Amazon announced that it had acquired Fabric.com, an
online fabric store.
 In July 2008, Amazon's IMDb subsidiary purchased Box Office Mojo, a
site that tracks movie sales in theatres.
 In August 2008, Amazon announced it had an agreement to purchase
Victoria, B.C. based Abe Books, seller of new, used, out of print and
rare books.[46] Later that month Amazon announced that it would
acquire Seattle-based Shelfari, a book-based social network site, for
an undisclosed sum.[47] As part of its acquisition of Abe books
Amazon also got an additional stake in Shelfari's competitor Library
Thing, which Abe Books had previously purchased a 40 percent stake
in, and whole ownership of Bookfinder.com, Gojaba.com, and listing-
management service FillZ, all owned by Abe Books at the time of
acquisition.
 In October 2008 acquired Reflexive Entertainment, a casual video
game development company.
 In July 2009 Amazon agreed to acquire Zappos, an online shoe and
apparel retailer. The deal is expected to close in fall 2009.
PRODUCTS AND
SERVICES
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 30¢. The service was discontinued on December 11, 2008. It
has been succeeded by Amazon Payments.
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 $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. By January 2005, nearly 200,000
individuals had donated over $15.7 million in the US alone.

2005
Prime: Amazon Prime offers customers unlimited expedited shipping
with no minimum purchase amount for a flat annual fee. The service
also offers discounted priority shipping rates. Amazon launched the
program in the continental United States in 2005, in Japan in June
2007, in the United Kingdom and Germany in November 2007, and in
France (as "Amazon Premium") in October 2008.
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 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 Bit Torrent. The service charges monthly
fees for data stored and for data transferred.
SQS: In April 2006, Amazon introduced Amazon Simple Queue Service
(Amazon SQS), a distributed queue messaging service.
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. In 2008,
Amazon improved the service adding Elastic Block Store (EBS),
offering persistent storage for Amazon EC2 instances and Elastic IP
addresses, static IP addresses designed for dynamic cloud computing.
2007
Amapedia: In January 2007 Amazon launched Amapedia, a
collaborative wiki for user-generated content to replace Product Wiki.
Unbox: In March 2007, Amazon launched an online video on demand
service, Amazon Unbox.
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).[52] Amazon's terms of use agreements
legally restrict use of the music, but Amazon does not use DRM to
enforce those terms.
Amazon MP3 sells music from the Big 4 record labels: EMI, Universal,
Warner Bros. Records, and Sony BMG, as well as many independents.
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.
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. Reviewers may either return the used
product to Amazon, or post a review and keep the product, within a
few months of receipt.
FPS: In August 2007 Amazon launched a payment service specifically
targeted at developers called Flexible Payment Service FPS. 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. The screen uses E Ink
technology to reduce battery consumption. In 2008 Amazon claimed
its library had grown to 200,000 titles.
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.
AmazonFresh: In August 2007, Amazon launched an invitation-only
beta-test for online grocery delivery. It has since rolled out in several
Seattle, Washington suburbs.
2008
Amazon MP3: In January 2008 Amazon announced they would be
rolling out their MP3 service to their subsidiary websites worldwide
throughout the year. On December 1, 2008, Amazon MP3 was made
available in the UK.
Sound Unwound: At the beginning of September, IMDB and
Amazon.com launched a Music metadata browsing site with wiki-like
user contribution.[56]
Frustration-Free Packaging: In November, Amazon partnered with
manufacturers including Fisher-Price, Mattel, Microsoft and electronics
manufacturer Transcend to offer products in minimal packaging. This
reduces environmental impact of the packaging and frustration with
opening "clamshell" type security packaging.
EC2 Windows Client: In Amazon Web Services launched a public beta
of Amazon Elastic Compute Cloud running Microsoft Windows Server
and Microsoft SQL Server.
Undated
Connect: Amazon Connect enables authors to post remarks on their
book pages 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 listing.
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.

Patent use
The company has been controversial for its alleged use of patents as a
competitive hindrance. The "1-click patent" 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. The boycott was discontinued in
September 2002.

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, and O'Reilly
published an open letter 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 with this petition. Bezos responded with
his own open letter.[66] 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".

On May 12, 2006, the USPTO ordered a re-examination 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.
Labor relations
Amazon has opposed efforts by trade unions to organize in both the United
States and the United Kingdom.

In 2001, 850 employees in Seattle were laid off by Amazon.com after a

unionization drive. The Washington Alliance of Technological Workers
(WashTech) accused the company of violating union laws, and claimed
Amazon managers subjected them to intimidation and heavy propaganda.
Amazon denies any link between the unionization effort and the lay-offs.

Also in 2001, Amazon.co.uk hired a US management consultancy

organization, The Burke Group, to assist in defeating a campaign by the
Graphical, Paper and Media Union (GPMU, now part of Amicus) to achieve
recognition in the Milton Keynes distribution depot. It was alleged that the
company victimized or sacked four union members during the 2001
recognition drive and held a series of captive meetings with employees.

The Humane Society of the United

States v. Amazon.com, Inc., et al.
Amazon at one time carried 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. A
campaign to boycott Amazon purchases gained momentum in August 2007
after the much publicized dog fighting case involving NFL quarterback
Michael Vick.

On May 21, 2008, Marburger Publishing agreed to settle with the Humane
Society by requesting that Amazon stop offering their magazine The Game
Cock for subscription. The second magazine named in the Humane Society
lawsuit, The Feathered Warrior, remains available.

BookSurge
In March 2008, sales representatives of Amazon's BookSurge division
started contacting publishers of print on demand titles to inform them that
for Amazon to continue selling their POD-produced books, they would need
to sign agreements with Amazon's own BookSurge POD company. Publishers
were told that eventually, the only POD titles that Amazon would be selling
would be those printed by their own company, BookSurge. Some publishers
felt that this ultimatum amounted to monopoly abuse, and questioned the
ethics of the move and its legality under anti-trust law.

Lawsuits with the State of New

York
In 2008 New York passed a law that would force online retailers to collect
sales taxes on shipments to New York State residents. Shortly after the law
was signed, Amazon.com filed a complaint in the New York Supreme Court
objecting to the law. The complaint wasn't based on whether in-State
customers should pay tax, but was based on the long standing practice of it
being the responsibility of the customer to report the sales tax (known as
use tax in this case) and not that of the out of State businesses. The lawsuit
was tossed out of court in January 2009 when New York State Supreme
Court Justice Eileen Bransten stated that "there is no basis upon which
Amazon can prevail."

Taxes paid
In April 2009, Business Week magazine reported that Amazon.com was one
of 25 US companies that paid the least US taxes. Amazon.com paid a 4.1
percent annual tax rate, far less than the standard 35 percent corporate
rate, based on an analysis of the company's financial figures for 2005-2008.
According to SEC filings, this rate was caused in part by lower tax rates for
Amazon.com's international subsidiaries.

False child sex abuse allegations

In September 2009 it emerged that Amazon was selling defamatory mp3
music downloads falsely suggesting a well known Premier League football
manager was a child sex offender. Despite a campaign urging the retailer to
withdraw the item, they refused to do so citing freedom of speech. The
company was finally forced to withdraw the item when legal action was
threatened. However, they continued to sell the item on their American,
German and French websites.
Entrepreneurship by former
employees
A number of companies have been started and funded by former
Amazon.com employees.[96] This is despite a non-compete agreement
Amazon employees must sign that prohibits starting a company with another
Amazon employee.

 BankBazaar.com was founded by Arjun Shetty, a former Senior

product manager at Amazon.com
 Hulu is led by Jason Kilar, a former SVP at Amazon.com.
 Jambool/Social Gold was co-founded by former Amazon engineers
Vikas Gupta and Reza Hussein.
 Teach Street was founded by Dave Schappell, an early Amazon.com
product manager.
 Trusera was founded by Keith Schorsch, an early Amazonian.
 Whrrl was founded by Jeff Holden, a former SVP at Amazon.com.
 Wikinvest was founded by Michael Sha.
IN OF AMAZON.COM
Amazon.com Company Culture
Amazon.com considers itself a completely customer centric company, which
is reflected in their company values statement:

 Customer Obsession: We start with the customer and work backwards.

 Innovation: If you don't listen to your customers you will fail. But if
you only listen to your customers you will also fail.
 Bias for Action: We live in a time of unheralded revolution and
insurmountable opportunity--provided we make every minute count.
 Ownership: Ownership matters when you're building a great company.
Owners think long-term, plead passionately for their projects and ideas,
and are empowered to respectfully challenge decisions.
 High Hiring Bar: When making a hiring decision we ask ourselves: "Will
I admire this person? Will I learn from this person? Is this person a
superstar?"
 Frugality: We spend money on things that really matter and believe
that frugality breeds resourcefulness, self-sufficiency, and invention!

Jobs at Amazon.com
There are currently over 14,000 Amazon.com employees worldwide. Since
Amazon.com is known for its technical innovations, here is some information
from their careers website that mentions the scope of their engineers:

”Our engineers tackle some of the most complex challenges in large-scale

computing. Software development engineers, technical program managers,
test engineers, and user-interface experts work in small teams company-
wide to contribute to the e-commerce platform that's used by:

 Tens of millions of Amazon.com customers

 Hundreds of thousands of sellers and merchants
 Tens of thousands of external developers”
The IT Department at Amazon.com also has a massive responsibility, as
they oversee an enormous system that is extremely reliable. Amazon.com
describes their IT group as “system, database, and networking experts (that)
build and operate highly reliable, scalable distributed systems with terabyte-
sized databases and infrastructure that can handle a massive number of
transactions.”

Technology at Amazon.com is definitely on the cutting edge! Some of the

technical positions that Amazon.com routinely recruits for include :

 Software Engineer
 Web Developers
 Technical Project/Program Managers
 QA Engineer
 Network Engineer
 System Administrators
 Database Administrators

Amazon.com Compensation and

Benefits
The compensation at Amzaon.com is known as being competitive. Their
benefits include the following components:

 Medical, dental and vision insurance with domestic partner coverage

 Company-paid basic life and accident coverage with optional additional
coverage
 Company-paid short- and long-term disability plan
 Employee assistance program including dependent-care referral
services and financial/legal services
 Health-care and dependent-care flexible spending accounts
 Time Off benefits for salaried employees are equal to two weeks of
vacation time in the first year, three weeks of vacation in the second and
six personal days every year (in addition to six company holidays)
 Savings and retirement benefits include Amazon.com Restricted Stock
Units, 401(k) savings plan with a company match and various employee
discount programs
 Many positions are eligible for relocation assistance through a
relocation services provider. Some of the relocation benefits listed are
very extensive but are very dependent on the position being considered.
COMPETITION- How
Amazon.com survived, thrived
and turned a profit
Unfettered by the rules of the old economy -- that profits drive stock value
-- Amazon.com Inc. was the poster child for the new Internet economy with
its dynamic, young chief executive and highly valued stock. But when the
technology bubble burst, the company quickly morphed from poster child
into punching bag, an example of Internet economics and excess.
Unlike many of its e-commerce counterparts, however, Amazon survived.
And yesterday the company posted its first annual profit, a milestone that
many analysts and observers never thought it would reach.

Now the company is more than just surviving, it's made itself the undisputed
leader of Internet commerce. Taking its cue from old and new ways of doing
business, its model today has helped the company to grow into a
multibillion-dollar business -- more important, one that can turn a profit.

Nearly a decade after Jeff Bezos founded Amazon in a Bellevue garage;

analysts again are predicting good things from Seattle's biggest Internet
venture, from new online stores to international expansion, even further
strengthening its dominating presence on the Web.

Seattle businessman Nick Hanauer, an early investor who is credited with

persuading Bezos to move to Seattle in the summer of 1994, knew the
company would one day turn a profit.

"What few people understood was that the reason that they didn't make
money was that for the previous five years every time there was a trade-off
between making more money or growing faster, we grew faster," said
Hanauer, whose $40,000 investment in Amazon once was valued at $250
million. "It wasn't that there weren't lots of opportunities to make money. It
was just that we had consciously foregone those opportunities to reach scale
and make it impossible to duplicate what we had done. And voila!"
Yesterday's earnings report isn't the only upbeat news. Its stock has more
than doubled in the past year. And some analysts expect the company to be
continuously profitable from now on.

A few years ago that wasn't the case.

The dark ages of e-commerce

After Bezos founded Amazon in 1994, he launched the Web site the following
July with the idea of selling books to a mass audience through the Internet.

The Web site -- text heavy and gray -- wasn't pretty.

But that didn't concern Madrona Venture Group's Tom Alberg, who invested
$100,000 in Amazon in 1995.

"Even though it was the dark ages in terms of what everybody was doing, it
worked and it worked pretty well," said Alberg, who recalls the site not
listing book publication dates and other key information.

By the fourth month in business, the company was selling more than 100
books a day. That impressed Alberg -- who introduced Bezos to venture
capitalists at Kleiner Perkins Caufield & Byers.

"I remember Jeff would call and say they got sales from New Hampshire and
Florida," recalls Alberg, who continues to sit on the board. "It sounded pretty
good, you know. Somebody from New Hampshire bought a book."

But Bezos created more than a bookstore; he created an online community.

The site was revolutionary early on for allowing average consumers to create
online product reviews. It not only drew people who wanted to buy books,
but also those who wanted to research them before buying.

"Amazon was probably the first truly worldwide community that was built
online," said Scott Lipsky, a former Amazon executive who now runs Seattle
start-up RGB Labs. "They happened to sell books. But the simple fact that
everyone was sharing their thoughts and book reviews made it a community
unto itself, very much like eBay." Today, Lipsky -- who left Amazon in 1997
-- thinks the community of more than 39 million customers will help the
company retain its lead over Wal-Mart, Barnes & Noble and others.

'Get big fast'

In 1996, its first full fiscal year in business, Amazon generated $15.7 million
sales -- a figure that would increase by 800 percent the following year.

A year after going public in 1997, Amazon added music CDs and movie
videos to the Web site, what many considered to be a wise move designed
to complement the company's expansive book collection. Then the company,
which touted itself as "Earth's biggest bookstore," demonstrated it had much
bigger plans.

Amazon added five more product categories -- toys, electronics, software,

video games and home improvement -- just a year later in time for the
Christmas holiday.

It was an era of hyper growth -- one later ridiculed by onlookers who

believed Amazon's "Get Big Fast" strategy was doomed. But early investors
and executives point to the rapid growth as a key to its success.

Hanauer to this day keeps a remnant of that period, an old T-shirt from an
Amazon summer picnic that says: "Eat another hot dog, get big fast."

"That relentless focus on doing whatever it took to get to scale,

understanding that turning profitable would not be easy but would have to
follow that, was a brilliant insight," said Hanauer.

As a venture capitalist, Alberg has taken some heat for helping to create an
atmosphere that led to the skyrocketing valuations of companies such as
Amazon. But he, too, said Bezos -- who originally forecast profitability in the
second or third year of existence -- seized an opportunity.

"The revolution in thinking was everybody saying you have a great

opportunity to grow quickly here, money is available, so let's take advantage
of it and use that money to grow quickly even if we lose money," said
Alberg.

By the end of 1999, sales for the year surpassed the billion-dollar mark to
$1.6 billion. Investors had driven the company's stock to close at an all-time
high of $106.69 on Dec. 10. And that same month, Time magazine named
Bezos "Person of the Year," calling him the "king of cyber commerce."

In just a few months, the king's crown would become tarnished.

Amazon.toast
A month following Bezos' crowning in Time, the company fired 150 workers,
mostly employees at its Seattle headquarters, as part of an internal
reorganization. Just five days later, Amazon reported a loss of $323 million
for the holiday fourth quarter and promised that future losses would be
lower. (The company, however, would later exceed that amount by more
than $200 million the following fourth quarter.)

By the summer of 2000, Amazon's stock price had dropped by more than
two-thirds and analysts began to criticize the retailer for venturing into too
many product categories and spreading itself too thin. One much publicized
report by Lehman Brothers warned investors that the company might run
out of cash and advised them to avoid its stock. Some on Wall Street
speculated that Amazon would file for bankruptcy or that another company
would buy it.

Naysayers nicknamed the company everything from Amazon. Bomb to

Amazon.toast as they predicted the collapse of the world's largest e-tailer.

In early 2001 -- when Amazon reported a whopping fiscal loss of $1.4

billion, which remains the company's worst annual performance -- Bezos
finally had an answer.
Changing focus
The chief executive told analysts in January 2001 that Amazon would report
a profit by year's end. But to do so the company had to cut expenses and
restructure its business model.

Amazon started the New Year by laying off 1,300 workers (about 15 percent
of its work force), closing two warehouses and shutting down a Seattle
customer-service center.

Bezos followed with a memo calling for the company to "get the crap out"
and stop selling products that weren't profitable.

At the same time, Amazon concentrated on better managing the

merchandise it would carry, from delivering packages presorted by
geography to postal hubs to developing complex algorithms that analyze
relationships between items that people buy so they could be grouped in the
same warehouse.

The company also looked to bolster its offering online -- not by expanding its
own warehouse inventory but by selling products in other companies'
warehouses.

Amazon transformed itself from a specialty retailer into an online shopping

portal, taking a cue from auctioneer eBay, which set itself up as a mediator
between buyer and seller. It started selling products from companies such as
Toys "R" Us and Target on its Web site. It added merchandise from smaller
retailers in its zShops. And it competed directly with eBay through its
Amazon Auctions.

Most recently, Amazon launched product categories with merchandise from

other retailers. Its apparel store, for instance, debuted in the fall of 2002
stocked with underwear, sweaters and jeans from companies such as
Nordstrom and Gap.

Although Amazon lists the merchandise on its Web site, it does not actually
take control of the inventory; the individual vendors are responsible for
fulfilling their orders. Amazon, however, receives a cut from the sales.
Amazon's sales from third-party vendors are still a small percentage of its
total revenue, but the margins are higher.

"The more things they can sell to (customers) and not do the dirty work, the
better the business grows," said Kate Delhagen, a retail analyst with
Forrester Research.

And by the end of 2001, Bezos came through on his word -- in fact, he did
even better. The company reported its first profit -- based on generally
accepted accounting principles and not on a pro forma basis as expected --
with fourth-quarter earnings of $5 million.

New technology and partners

But the company knew that one quarter of profits -- especially one that eked
out earnings of just 1 cent a share -- wouldn't be enough.

Amazon has since posted quarterly profits in the fourth quarter of 2002 and
in the third quarter of 2003, the first non-holiday quarter to post earnings.
And yesterday's fourth-quarter profit report is the first time that Amazon has
reported two quarters of earnings back to back.

But to do so, it has had to continually drive sales and refine its changing
business. The company launched a free shipping promotion that eliminated
the fee for orders of more than $99. After several tests, the company settled
on a $25 price point last year. And it continues to offer discounts on
merchandise, offering consumers personalized daily deals on everything
from kitchenware to computer hardware.

In the past few months, Amazon has rapidly expanded the number of
product categories on its site. It added four new stores, currently in beta,
just before the holiday season: sporting goods, gourmet foods, jewelry, and
health and beauty. Customers can now buy everything from soccer balls to
Alaska smoked salmon to three-stone sapphire rings.

The company will also likely unveil new technology developments. One of its
most recent, which debuted in November, lets customers search for words
that appear in books and view the text. Amazon has been reported to be
working on its own search engine that would possibly compete with Google.
The company might also look overseas to grow its business, opening new
stores on its international Web sites or launch Amazon in other Asia-Pacific
and European countries where it does not currently exist.

"I think what's key here, the company is always thinking about changes in
the marketplace dynamics, consumers' behavior and how they can best be
relevant and address consumers," said Jeetil Patel, senior analyst at
Deutsche Bank Securities, which has an investment in Amazon.

'An alien life form'

Nearly 10 years after Jeff Bezos founded Amazon in Seattle, his name
remains synonymous with the company. The 40-year-old, known for his
trademark laugh, has been the face of the company since its inception.

Hanauer doesn't get the sense that his longtime friend -- who he describes
as "the smartest man in the world" -- is getting ready to turn over the reins
anytime soon.

"He is absolutely as single-mindedly focused now on Amazon as he ever

was. He works just as hard today as he did on the first day. He has lost none
of his enthusiasm," said Hanauer. "He is an alien life form. I am serious,
honestly. He is wired different than any other human I know."

At a lunch two months ago, Lipsky -- the former Amazon executive -- asked
Bezos whether he would consider doing another start-up. The answer was a
resounding no.

"He really doesn't miss being the small company entrepreneur," said Lipsky.
"He seems very comfortable being the king of a very successful and growing
empire."

That may be the case. But some believe Amazon needs to do more to build
executive management bench strength. For now, though, Bezos is still firmly
in control.

And he has not lost his passion for making the online consumer's experience
better. That's the mantra he used to build Amazon over the past decade.
And it's something that he still preaches to this day.
"The better you can make your customer experience ... the more customers
you'll attract, the larger share of that household's purchases you will
attract," Bezos said during a conference call after yesterday's earnings
announcement. "You can become a bigger part of a customer's life by just
simply doing a better job for them. It's a very, very simple-minded
approach."
 MARKETING
STRATEGY
Founding
1. Amazon.com was started by Jeff Bezos in 1994. At the time, his company
was run completely from his garage in Bellevue, Washington. He was
able to secure funding from Nick Hanauer. This first investment of
$40,000 was joined by a larger, $100,000 investment from Tom Alburg
that helped make the new website more user-friendly.

During the first month of business, Bezos fulfilled and shipped orders to
all 50 states, and to 48 countries. Books were the only product available
at that time.

Bezos wanted Amazon.com to be more than just a retail website; he

wanted to create an online community. Early on, he added a feature that
enabled readers to add their own book reviews for all customers to view.

Going Public
2. On May 15, 1997, the company went public. The initial public offering
(IPO) was targeted at $18, but by the end of the day, public demand had
pushed the share price to more than $24 per share. The company had
raised $54 million. Amazon.com is listed on Nasdaq as AMZN.

Expansion and Popularity

3. In 1997, Amazon.com added movies and music to its offerings.

In 1998, Amazon opened its first international sites in the United

Kingdom and Germany, where it quickly enjoyed success.

In 1999 the company opened four order fulfillment centers in Fernley,

Nevada; Coffeyville, Kansas; and Campbellsville and Lexington, Kentucky
to handle the large mass of orders.
 Time Magazine featured Jeffrey Preston Bezos as Person of the Year in
1999, calling him "king of cyber commerce."

Features and Upgrades

4. The "Look Inside the Book" feature, added in 2001, was immediately
popular as a tool for consumers to see if the book they were looking at
would fit their needs. Later, the "Search Inside the Book" feature, added
in 2003, made it possible for consumers to search key words in the text
of the book.

Amazon added Marketplace, where sellers of used books could offer

products for sale with a small commission collected by Amazon.

Amazon also teamed up with many companies to offer their products

through the website.

Growth and Success Sustained

5. In January 2009, Amazon reported $6.7 billion in fourth quarter 2008
sales. The company now has fulfillment centers in 12 U.S. states and
eight countries. Its headquarters are in Seattle, Washington, and the
company employs more than 21,000 people worldwide.
 CONCLUSION

Hits
 Online reviews: Amazon lets customers submit feedback on books and
other products sold on the site. It becomes a popular online feature as
consumers flock to share their thoughts with millions.
 ZShops: Amazon charges other merchants a monthly fee to sell their
wares on the Web site. ZShops have higher profit margins than the
company's own direct sales. Merchants who sell their products through
zShops pay Amazon a monthly fee of $39.99 and a closing fee of 5
percent on items sold for $25 or less.
 Wish Lists: Customers can create lists of the products that they want
from Amazon.com and save the list for online viewing by others.
 Free shipping: After testing several price points, Amazon eliminates
shipping fees for orders of more than $25, its lowest price point yet.
Although it costs the company in additional shipping expenses, the
move boosts sales and Amazon decides to maintain the offer
indefinitely.

Misses
 Charging for book recommendations: Amazon charges publishers for
placement of books on the Web site. After media reports disclose the
practice, Amazon says it will tell customers when publishers have paid
for its recommendation.
 Pets.com: Amazon agrees to buy 50 percent of the online pet supply
store. Less than two years later, Pets.com says it will close after failing
to raise additional financing. Its stock is worth 22 cents a share after it
announces its closure.
 Kozmo.com: Amazon invests $60 million in the company, which home
delivers videos and snacks ordered on the Internet. (Fellow Seattle
Company Starbucks Corp. is also an investor.) Kozmo.com announces
it will close less than a year-and-a-half later after it cannot obtain
additional funding.
 Living.com: Amazon invests in the online home furnishing store and
agreed to add a Living.com tab on its Web site in return for $145
million over five years. Just six months later, Living.com announces
that it would file for Chapter 7 bankruptcy protection. Living.com is
now the Web site for the Fine Living television channel.
ACKNOWLEDGEMENT
I wish to express my heart felt
gratitude towards Ms. Supriya Pathak for her
guidance, help and encouragement in completing my
project.

Then, I would like to thank my parents

who helped me to collect subsequent matter and
relevant items useful for making my project.

Last but not the least; I would like to

thank my friends who have been an helping hand
throughout.
CERTIFICATE
It is certified that SHUBHI SRIVASTAVA of
National P.G. College, Lucknow has been alloted the
topic HISTORY OF AMAZON.COM for project
towards partial fulfillment of BBA V semester course.

SUBJECT:
E-COMMERCE SUPERVISOR’S
SIGNATURE

DATE:
 E- COMMERCE
HISTORY OF
AMAZON.COM

SUBMITTED TO: SUBMITTED BY:

Ms. SUPRIYA SHUBHI SRI.
PATHAK BBA V SEM
ROLL NO. 46

NATIONAL P.G. COLLEGE

DEPARTMENT OF MANAGEMENT
BIBLIOGRAPHY