| Amazon.com, Inc. | |
|---|---|
| Type | Public (NASDAQ: AMZN) |
| Founded | 1994 |
| Headquarters | Seattle, Washington, United States |
| Key people | Jeff Bezos, founder, president, CEO, chairman Tom Szkutak, senior VP/CFO Werner Vogels, VP/CTO |
| Industry | Retail |
| Products | Amazon.com A9.com Alexa Internet IMDb |
| Revenue | ▲ US$14.84 billion (2007) |
| Net income | ▲ US$476 million (2007) |
| Employees | 17,000 (2007) |
| Slogan | "...and you're done" |
| Website | www.amazon.com |
| Type of site | e-commerce |
| Advertising | web banners and videos |
| Available in | English, Chinese, French, German, Japanese |
| Launched | 1995 |
Amazon.com, Inc. (NASDAQ: AMZN) is an American electronic commerce (e-commerce) company in Seattle, Washington. Amazon was one of the first major companies to sell goods by Internet, and was an iconic "stock in which to invest" of the late 1990s dot-com bubble[citation needed]. After the collapse, the public[who?] became skeptical about Amazon's business model, although it has since remained profitable.[citation needed]
Jeff Bezos founded Amazon.com, Inc. in 1994, and launched it online in 1995. Amazon.com started as an on-line bookstore, but soon diversified to product lines of VHS, DVD, music CDs, MP3 format, computer software, video games, electronics, apparel, furniture, food, toys, etc. Amazon has established separate websites in Canada, the United Kingdom, Germany, France, China, and Japan. It also provides global shipping to certain countries for some of its products.
Amazon was founded in 1994, spurred by what Bezos called "regret minimization framework", his effort to fend off regret for not staking a claim in the Internet gold rush.[1] While company lore says Bezos wrote the business plan while he and his wife drove from New York to Seattle, Washington[2], that account appears to be apocryphal.[3]
The company began as an online bookstore named "Cadabra.com", a name quickly abandoned for sounding like "cadaver";[3] while the largest brick-and-mortar bookstores and mail-order catalogs for books might offer 200,000 titles, an on-line bookstore could offer more. Bezos renamed the company "Amazon" after the world's biggest river. Since 2000, Amazon's logotype is an arrow leading from A to Z, representing the desire to sell many products.[4]
In 1994, the company incorporated in the state of Washington, beginning service in July 1995, and was reincorporated in 1996 in Delaware. The first book Amazon.com sold was Douglas Hofstadter's Fluid Concepts and Creative Analogies: Computer Models of the Fundamental Mechanisms of Thought.[5] Amazon.com issued its initial public offering of stock on May 15, 1997, trading under the NASDAQ stock exchange symbol AMZN, at an IPO price of US$18.00 a share (U.S. $1.50 after three stock splits in the late 1990s).
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 2002: U.S. $5 million, just 1¢ a share, on revenues of more than U.S. $1 billion, but the profit was symbolically important.
The company remains profitable: 2003 net income was U.S.$35.3 million, U.S.$588.50 million in 2004, U.S.$359 million in 2005, and U.S.$190 million in 2006 (including a U.S.$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 U.S.$1.58 billion. Revenues increased thanks to product diversification and an international presence: US$3.9 billion in 2002, U.S.$5.3 billion in 2003, U.S.$6.9 billion in 2004, U.S.$8.5 billion in 2005, and U.S.$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.
In 1999, Time Magazine named Bezos Person of the Year, recognizing the company's success in popularizing on-line shopping.
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.[6]
Amazon.com powers and operates retail web sites for Target, Sears Canada, Benefit Cosmetics, Bebe Stores, Timex Corporation, Marks & Spencer, Mothercare and Lacoste. For a growing number of enterprise clients, currently including the UK merchants Marks & Spencer, Benefit Cosmetics' UK entity 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. Amazon Web Services also powers AOL's Shop@AOL.
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.[7]
The company employs software developers in medium- to large-sized centers across the globe. International locations include:
Fulfillment centers are located in the following cities, often near airports:
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.[9] Old links to zShop ([1]) now simply redirect to the Amazon home page, while old links to Auctions ([2]) 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,[10] 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.[10] 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.".[11] 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.[11]
On May 16, 2007 Amazon announced its intention to launch its own online music store.[12] The store launched in public beta September 25, 2007, selling downloads exclusively in MP3 format without digital rights management.[13].
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.[14] 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.[15]
Amazon.com is known for its candid reviews and its capabilities for recommending products to its customers. The 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).
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.[16]
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.
Additionally, Amazon created a feature in recent years that allowed users to comment on reviews. This has been met with a mixed reaction, since a few of the high-profile sellers have been getting "spammed" in these forums, regardless of the quality of the reviews. Amazon has done little to enforce the rules of these forums, but did recently add an "ignore" button feature to help counteract the spamming. Nonetheless, at least one critic in the top 50 quit writing for Amazon and began contributing to another site due to the spam issues and Amazon's inability to enforce the rules.[17]
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.[18][19] 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[20]. 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", and third party sellers who list and sell products on the Amazon website(s).
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.[21] 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.[22] AStore is a new affiliate product that 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 worldwide 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/Paypal, 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.[23]
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.
In December 2007, Amazon was fined €100,000 by The Tribunal de Grande Instance in France for offering free shipping. The 1981 Lang Law prohibits companies from discounting books by more than 5%.[30]
Amazon.com has incorporated a number of products and services into its shopping model, either through development or acquisition.
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]
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.[40]
The company has been controversial for its alleged use of patents as a competitive hindrance. The "1-click patent"[41] 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.[42] The boycott was discontinued in September 2002.[43]
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,[44] and O'Reilly published an open letter[45] 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[46] with this petition. Bezos responded with his own open letter.[47] 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".[48]
On May 12, 2006, the USPTO ordered a reexamination[49] 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.[50]
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.[51] 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,[52] but the litigation was dropped in 2004.[53]
Amazon.com previously did not publish its toll-free customer service number on its own web site. However, customers can now submit written customer service requests (which are answered by e-mail), call a toll-free number, or use a click-to-call service to be connected by phone to an available service representative.[54]
Before Amazon published its phone number, numerous web pages existed solely to publish the Amazon.com customer service phone numbers. One such page received in excess of 23,000 visits in December 2004 alone.[55] Despite the perceived difficulty in reaching customer service by phone, Amazon.com "remains the leader among e-tailers" in customer satisfaction according to the American Customer Satisfaction Index's fourth-quarter 2007 survey.[56]
Amazon has opposed efforts by trades 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 an unionisation 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 unionisation effort and the lay-offs.[57]
Also in 2001, Amazon.co.uk hired a US union-busting organization, The Burke Group, to assist in defeating a union recognition 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 victimised or sacked four union members during the 2001 recognition drive and held a series of captive meetings with employees.[58][59]
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.
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.[60] A campaign to boycott Amazon purchases gained momentum in August 2007 after the much publicized dog fighting case involving NFL quarterback Michael Vick.[61]
On May 21, 2008, Marburger Publishing agreed to settle with the Humane Society by requesting that Amazon stop offering their magazine The Gamecock for subscription. The second magazine named in the Humane Society lawsuit, The Feathered Warrior, remains available.[62]
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 non anonymous.[63][64]
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.[65]
In 2008, Amazon UK came under criticism for attempting to prevent publishers from direct selling at discount from their own websites. Amazon's argument was that they should be able to pay the publishers based on the lower prices offered on their websites, rather than on the full RRP.[66][67]
In June 2008 Amazon UK drew criticism in the British publishing community following their withdrawal from sale of key titles published by Hachette Livre UK. The withdrawal is apparently intended to put pressure on the publisher to provide levels of discount described by the trade as unreasonable. Curtis Brown's managing director Jonathan Lloyd was quoted in The Bookseller magazine as saying: “I think the entire industry of publishers, authors and agents are 100% behind [Hachette]. Someone has to draw a line in the sand. Publishers have given 1% a year away to retailers, so where does it stop? Using authors as a financial football is disgraceful.”[68][69]
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.
Additionally, at the bottom of the source code for the main page the word 'MEOW' is written in a comment.
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