-Oliver Lam
Amazon.com, by definition, is a US-based multinational electronic commerce company. It is the largest United States online retailer. It was originally named Cadabra, Inc., but this was changed because many people misheard the name as “cadaver”. It started out as an online bookstore, but soon diversified its product offerings to include apparel, computer software, CDs, DVDs, electronics, food, furniture, toys, and videogames. It has also since expanded to locations around the globe, including Canada, the UK, Germany, France, Italy, Japan and China, as well as providing international shipping to selected countries for selected products.
The following blog entry looks into the background of one of the leading retail companies in the world.
History
Amazon.com was put online in July of 1995 when founder Jeff Bezos executed his first iteration of his business plan that he founded and conceived in 1994. Purportedly Bezos wrote Amazon.com’s business plan during a road trip with his wife from New York to Seattle. Originally, Bezos planned for Amazon.com to be an online bookstore, based on the idea that most brick-and-mortar bookstores and mail-order catalogs could only offer a limited number of books (due to cost constraints in stocking and/or printing catalogs), while a website could offer potentially every title ever published.
Amazon.com was original incorporated in 1994 in Washington State, and reincorporated in Delaware in 1996. This was followed by an initial public offering (IPO) in mid-1997 at a price of 18.00 USD per share on NASDAQ, under the stock symbol AMZN. Its business plan deviated from most in that it did not expect profitability until a minimum of four years. This eventually led to complaints from stockholders regarding the slow growth of Amazon.com. However, its stability during times of volatility for similar companies, such as the dot-com bubble burst, proved Amazon.com’s intrinsic value and worth. Due to Amazon.com’s resilience, Bezos was hailed as one of the key players in making online shopping popular.
Branding
Due to issues with mishearing the name, Bezos changed the name of the company from Cadabra to Amazon.com. Amazon.com was taken from the Amazon River, the largest river in the world, most likely to represent the largest flow of literature that would occur when Amazon.com comes into full stride. It was also chosen because internet search engines were young during its development, and Bezos hoped to make Amazon.com a top hit with online alphabetical directories and search engines that ranked results likewise. Its logo (displayed below) consists of the text “amazon.com” with a curved arrow leading from the letter A to the letter Z, forming a smile representative of the customer satisfaction it hopes to achieve as well as an unofficial goal to have every product in the alphabet.
Corporate Expansion
As is evident now, Amazon.com’s reach is not limited merely to customers residing in the United States, but more or less any place in the world. Additionally, Amazon.com is no longer just an online bookstore, but rather an online marketplace where Amazon.com and affiliated merchants can sell a variety of different products. These range from appliances, to instruments, to just about anything. All this was made possible in part to Amazon’s aggressive acquisition scheme, as detailed in the timeline below:
1998 - Bookpages.co.uk
1999 - Internet Movie Database (IMDb), PlanetAll, Junglee.com, Alexa Internet, Accept.com, and Exchange.com
2003 - CD Now
2004 - Joyo.com
2005 - BookSurge, Mobipocket.com, CreateSpace.com
2006 - ShopBop,
2007 - dpreview.com, Brilliance Audio
2008 - Audible.com, Fabric.com, Box Office Mojo, AbeBooks, Shelfari, Reflexive Entertainment
2009 - Zappos
2010 - Touchco, Woot, Quidsi, Byvip, Arnie Street
2011 - Lovefilm
Financial Success
The net incomes of Amazon.com from 2003 to 2006 were $35 million, $588 million, $359 million, and $190 million, respectively. The retained earnings for 2006 to 2009 were negative $1.8 billion, negative $1.4 billion, negative $730 million, and $172 million, respectively. The change in annual revenues from 2002 to 2006 was from $3.9 billion to $10.7 billion.
Amazon.com entered the S&P500 index in 2005, and the S&P100 index in 2008. It also has a higher market capitalization than Barnes and Noble, Best Buy, Costco, Home Depot, and Target. Amazon.com generates almost three times the Internet sales revenue of Staples, Inc., the second highest in Internet sales revenue after Amazon.
Geographical Expansion
Amazon has several types of locations, including offices, fulfillment centers, customer service centers, and software development centers. These locations are scattered across North America, Latin America, Europe and Asia. It’s due to its international presence that Amazon.com is so successful and well-known in modern times.
Offices/Headquarters - The company has its headquarters located in the South Lake Union of Seattle, and all of its office locations are in the Seattle area, including Union Station, Beacon Hill, and The Columbia Center.
Software Development Centers - Because of Amazon.com’s involvement of software developers across the globe in their development teams, software development centers can be found in Beijing, India, Ireland, Japan, Romania, San Francisco, Seattle, Scotland, and South Africa.
Fulfillment/Customer Service/Warehousing Centers – These are the most numerous of the location types having locations in Arizona, Delaware, Indiana, Kansas, Ohio, Kentucky, Nevada, New Hampshire, Pennsylvania, Tennessee, Virginia and Washington State in the United States, Ontario in Canada, England, Scotland, Wales, France and Germany in Europe, as well as in Japan, and China in Asia.
Notable Original Products and Services
Kindle - In 2007, Amazon.com released an electronic book reader called the Kindle to the market to popularize the purchase of such books. Electronic books present many advantages over physical copies, including reduced cost, faster delivery, and not damageable. The Kindle has become very popular as a mobile device dedicated to reading, and competes well against the iPad due to its single function focus.
Amazon Prime – Amazon has also developed a service called Amazon Prime, where subscribers receive free two-day shipping. They even have provided this service to college students for free for a year. The development of this service represents Amazon’s commitment to increasing the flow of products from seller to consumer, while the success of this service displays how online shopping has permeated our lifestyles, to the point that the time taken to order a product using Amazon Prime may be the same or even faster than searching for the product ourselves in a brick-and-mortar store.
Recent Developments
iPad Application – Amazon.com has recently released an iPad/iPhone application for their online store, effectively gaining exposure for mobile users. The application allows users to purchase books and products from Amazon from their mobile devices, a show of Amazon’s further commitment to making products readily available to consumers.
Amazon’s Impact/Conclusion
Amazon.com has achieved many firsts and it would have been difficult to sum up its positive impact on the world without covering its history first (which is why its history was covered above). Its success has stemmed from everything it has pursued, and through this it is hard to come up with a specific description for Amazon.com as an entity. The history only serves to illuminate on how much more wide of an influence Amazon.com has since its inception.
Amazon.com has grown from one of the first online bookstores into pretty much the world’s biggest online e-commerce center where people can acquire just about anything. Bezos’ innovative idea and ambitious pursuit of such a long term goal has introduced e-commerce to the world in such a way that everyone trusts and even relies on it, where as 10 years ago such would not be the case. By identifying and pursuing all potentially lucrative technologies, Amazon.com has literally had its fingers in many pies, all of which have proven to drive the advancement of technology.
It is hard to tell where Amazon.com will head towards in the future, besides becoming more of a necessary service in people’s lives. This is because of its innovative culture and strategy; it is hard to predict exactly what Amazon.com will do next. One initiative that did come up recently was its development of a Cloud storage system for music, in order to compete with iTunes. However, judging from its history, it can be said for certain that Amazon.com strives to increase its value, usefulness, and number of services to its customers.
Amazon.com was put online in July of 1995 when founder Jeff Bezos executed his first iteration of his business plan that he founded and conceived in 1994. Purportedly Bezos wrote Amazon.com’s business plan during a road trip with his wife from New York to Seattle. Originally, Bezos planned for Amazon.com to be an online bookstore, based on the idea that most brick-and-mortar bookstores and mail-order catalogs could only offer a limited number of books (due to cost constraints in stocking and/or printing catalogs), while a website could offer potentially every title ever published.
Amazon.com was original incorporated in 1994 in Washington State, and reincorporated in Delaware in 1996. This was followed by an initial public offering (IPO) in mid-1997 at a price of 18.00 USD per share on NASDAQ, under the stock symbol AMZN. Its business plan deviated from most in that it did not expect profitability until a minimum of four years. This eventually led to complaints from stockholders regarding the slow growth of Amazon.com. However, its stability during times of volatility for similar companies, such as the dot-com bubble burst, proved Amazon.com’s intrinsic value and worth. Due to Amazon.com’s resilience, Bezos was hailed as one of the key players in making online shopping popular.
Branding
Due to issues with mishearing the name, Bezos changed the name of the company from Cadabra to Amazon.com. Amazon.com was taken from the Amazon River, the largest river in the world, most likely to represent the largest flow of literature that would occur when Amazon.com comes into full stride. It was also chosen because internet search engines were young during its development, and Bezos hoped to make Amazon.com a top hit with online alphabetical directories and search engines that ranked results likewise. Its logo (displayed below) consists of the text “amazon.com” with a curved arrow leading from the letter A to the letter Z, forming a smile representative of the customer satisfaction it hopes to achieve as well as an unofficial goal to have every product in the alphabet.
The Amazon.com logo.
Corporate Expansion
As is evident now, Amazon.com’s reach is not limited merely to customers residing in the United States, but more or less any place in the world. Additionally, Amazon.com is no longer just an online bookstore, but rather an online marketplace where Amazon.com and affiliated merchants can sell a variety of different products. These range from appliances, to instruments, to just about anything. All this was made possible in part to Amazon’s aggressive acquisition scheme, as detailed in the timeline below:
1998 - Bookpages.co.uk
1999 - Internet Movie Database (IMDb), PlanetAll, Junglee.com, Alexa Internet, Accept.com, and Exchange.com
2003 - CD Now
2004 - Joyo.com
2005 - BookSurge, Mobipocket.com, CreateSpace.com
2006 - ShopBop,
2007 - dpreview.com, Brilliance Audio
2008 - Audible.com, Fabric.com, Box Office Mojo, AbeBooks, Shelfari, Reflexive Entertainment
2009 - Zappos
2010 - Touchco, Woot, Quidsi, Byvip, Arnie Street
2011 - Lovefilm
Financial Success
The net incomes of Amazon.com from 2003 to 2006 were $35 million, $588 million, $359 million, and $190 million, respectively. The retained earnings for 2006 to 2009 were negative $1.8 billion, negative $1.4 billion, negative $730 million, and $172 million, respectively. The change in annual revenues from 2002 to 2006 was from $3.9 billion to $10.7 billion.
Amazon.com entered the S&P500 index in 2005, and the S&P100 index in 2008. It also has a higher market capitalization than Barnes and Noble, Best Buy, Costco, Home Depot, and Target. Amazon.com generates almost three times the Internet sales revenue of Staples, Inc., the second highest in Internet sales revenue after Amazon.
Geographical Expansion
Amazon has several types of locations, including offices, fulfillment centers, customer service centers, and software development centers. These locations are scattered across North America, Latin America, Europe and Asia. It’s due to its international presence that Amazon.com is so successful and well-known in modern times.
Offices/Headquarters - The company has its headquarters located in the South Lake Union of Seattle, and all of its office locations are in the Seattle area, including Union Station, Beacon Hill, and The Columbia Center.
One of the Amazon.com Office Locations.
Software Development Centers - Because of Amazon.com’s involvement of software developers across the globe in their development teams, software development centers can be found in Beijing, India, Ireland, Japan, Romania, San Francisco, Seattle, Scotland, and South Africa.
Fulfillment/Customer Service/Warehousing Centers – These are the most numerous of the location types having locations in Arizona, Delaware, Indiana, Kansas, Ohio, Kentucky, Nevada, New Hampshire, Pennsylvania, Tennessee, Virginia and Washington State in the United States, Ontario in Canada, England, Scotland, Wales, France and Germany in Europe, as well as in Japan, and China in Asia.
Notable Original Products and Services
Kindle - In 2007, Amazon.com released an electronic book reader called the Kindle to the market to popularize the purchase of such books. Electronic books present many advantages over physical copies, including reduced cost, faster delivery, and not damageable. The Kindle has become very popular as a mobile device dedicated to reading, and competes well against the iPad due to its single function focus.
The third-generation Kindle eBook Reader.
Amazon Prime – Amazon has also developed a service called Amazon Prime, where subscribers receive free two-day shipping. They even have provided this service to college students for free for a year. The development of this service represents Amazon’s commitment to increasing the flow of products from seller to consumer, while the success of this service displays how online shopping has permeated our lifestyles, to the point that the time taken to order a product using Amazon Prime may be the same or even faster than searching for the product ourselves in a brick-and-mortar store.
The Amazon Prime Logo.
Recent Developments
iPad Application – Amazon.com has recently released an iPad/iPhone application for their online store, effectively gaining exposure for mobile users. The application allows users to purchase books and products from Amazon from their mobile devices, a show of Amazon’s further commitment to making products readily available to consumers.
Amazon’s Impact/Conclusion
Amazon.com has achieved many firsts and it would have been difficult to sum up its positive impact on the world without covering its history first (which is why its history was covered above). Its success has stemmed from everything it has pursued, and through this it is hard to come up with a specific description for Amazon.com as an entity. The history only serves to illuminate on how much more wide of an influence Amazon.com has since its inception.
Amazon.com has grown from one of the first online bookstores into pretty much the world’s biggest online e-commerce center where people can acquire just about anything. Bezos’ innovative idea and ambitious pursuit of such a long term goal has introduced e-commerce to the world in such a way that everyone trusts and even relies on it, where as 10 years ago such would not be the case. By identifying and pursuing all potentially lucrative technologies, Amazon.com has literally had its fingers in many pies, all of which have proven to drive the advancement of technology.
It is hard to tell where Amazon.com will head towards in the future, besides becoming more of a necessary service in people’s lives. This is because of its innovative culture and strategy; it is hard to predict exactly what Amazon.com will do next. One initiative that did come up recently was its development of a Cloud storage system for music, in order to compete with iTunes. However, judging from its history, it can be said for certain that Amazon.com strives to increase its value, usefulness, and number of services to its customers.
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