Amazon.com
(NASDAQ:AMZN) is an American electronic commerce company
based in Seattle, Washington. It was one of the first
major companies to sell goods over the Internet. Amazon
owns Alexa Internet, a9.com, and the Internet Movie
Database (IMDb).
Founded
as Cadabra.com by Jeff Bezos in 1994, the mainstream
Internet's early days, the company began as an online
bookstore. Bezos saw the potential of the Internet;
while the largest brick-and-mortar bookstore might sell
upwards of 200,000 titles, an online bookstore could
sell many times more. Bezos renamed his company Amazon
in deference to the world's most voluminous river, the
Amazon. Amazon.com began service in July 1995. The company
was originally incorporated in 1994 in the state of
Washington and was reincorporated in 1996 in Delaware.
Amazon.com had its initial public offering on May 15,
1997, trading on the NASDAQ stock exchange under the
symbol AMZN at an IPO price of $18.00 per share (equivalent
to $1.50 today due to stock splits).
Amazon's
initial business plan was unique, in that the company
did not expect to turn a profit for a good four to five
years after it was founded. This strategy proved to
be a sound one in the wake of the dotcom collapse of
2000. Amazon grew at a steady pace in the late 1990s
while other Internet companies appeared out of nowhere
and grew at a blindingly fast pace. Amazon's "slow"
growth caused a number of its stockholders to complain,
saying that the company was not reaching profitability
fast enough. When the Internet "bubble" burst
and many e-companies began going out of business, Amazon
perservered and finally turned its first-ever profit
in the fourth quarter of 2002. It totaled a meager $5
million, just 1 cent per share, on revenues of over
$1 billion, but it was extremely important symbolically
for a company that kept promising profitability but
wasn't delivering. It has since remained profitable
and maintained revenues of over $1 billion per fiscal
quarter. In January 2004 Amazon posted its first full-year
net profit (for calendar year 2003). Its profits were
$35.3 million on revenues of $5.65 billion. Much of
the growth of the company was due to its international
division.Recognizing the website's success in popularizing
online shopping, Bezos was named Man of the Year by
Time Magazine in 1999.
Amazon's
bookstore quickly began expanding, branching off into
retail sales of music CDs, videos and DVDs, software,
consumer electronics, kitchen items, tools, lawn and
garden items, toys, apparel, sporting goods, gourmet
food, jewelry, watches, health and personal-care items,
and more. In January 2004, Amazon launched its Presidential
Candidates feature, whereby customers could donate from
$5 to $200 to the campaigns of U.S. presidential hopefuls.
Site
features
Amazon assigns a unique identifier to all items it sells,
the Amazon Standard Identification Number (ASIN). For
books, the ASIN is the same as the item's ISBN. Amazon
offers access to its catalog via web services, much
as Google does to its search engine. Google also provides
search services directly on Amazon's U.S. site.
Since
October 23, 2003, the company (in cooperation with around
130 publishers) has been making it possible for customers
to search for keywords in the full text of more than
120,000 books (or 33 million pages of text). This allows
users to perform searches on copyrighted printed material
that is not readily available elsewhere except for texts
in the public domain (see list of digital library projects
for examples of these) or otherwise available in digital
form. The feature is known as "Search Inside the
Book." To avoid copyright violations, Amazon.com
does not return the computer-readable text of the book
but rather a picture of the page containing the found
excerpt, disables printing of the pages, and puts limits
on the number of pages in a book a single user can access.
Patent
controversies
The company has been controversial for its use of patents
as an alleged hindrance to competitors. The "one
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 25, 2003, the company was granted a patent
titled "Method and system for conducting a discussion
relating to an item" on Internet discussion boards.
Expansion
and partnerships
Amazon.com operates retail websites not only in the
United States, but also in Canada, the United Kingdom,
Germany, Austria, France and Japan. In addition, the
websites of Borders.com, Waldenbooks.com, Virginmega.com,
Virginmega.co.jp, Waterstones.co.uk, CDNOW.com and HMV.com
now redirect to Amazon's site for the country in question,
for which these companies are paid referral fees. Typing
ToysRUs.com into one's browser will similarly bring
up Amazon.com's Toys & Games tab. Amazon.com also
operates the retail websites of Target Corporation's
internet properties (including the online stores of
Target, Marshall Field's, and Mervyn's) and provides
the technology behind AOL Shopping and the online NBA
store.
According
to information in the Amazon.com discussion forums,
Amazon derives about 40% of its sales from affiliates,
whom they call "associates". By the end of
2003, Amazon had signed up almost one million associates.
Amazon bought the Internet Movie Database (IMDb) in
April 1998, a move that upset a number of its long-time
users; the transformation of IMDb from a public-domain,
nonprofit site to a commercial venture was seen as a
slap in the face to many Internet users. However, the
IMDb has continued to grow and prosper.
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
2004, Amazon launched a new search engine called a9.com.
A9.com incorporates the above-mentioned Search Inside
the Book feature, allowing users to search within the
text of books as well as searching for text on the Web.
