| Type | Public |
|---|---|
| Traded as | NASDAQ: AMZN NASDAQ-100 Component S&P 500 Component |
| Founded | 1994 |
| Founder(s) | Jeff Bezos |
| Headquarters | Seattle, Washington, U.S. |
| Area served | USA, UK, Japan, Germany, Canada |
| Key people | Jeff Bezos (Chairman, President & CEO) |
| Industry | Online shopping, Cloud computing |
| Products | A2Z Development, A9.com, Alexa Internet, Amazon.com, Amazon Kindle, Amazon Studios, Amazon Web Services, Audible.com, Endless.com, IMDb, LoveFilm, Zappos.com, Woot |
| Revenue | US$ 34.204 billion (2010)[1] |
| Operating income | US$ 1.406 billion (2010)[1] |
| Net income | US$ 1.152 billion (2010)[1] |
| Total assets | US$ 18.797 billion (2010)[1] |
| Total equity | US$ 6.864 billion (2010)[1] |
| Employees | 33,700 (2010)[1] |
| Website | Amazon.com |
| Alexa rank | 11 (January 2012[update])[2] |
| Type of site | E-commerce |
| Advertising | Web banners, Videos |
| Available in | English, Japanese, German, French, Brazilian Portuguese, Italian, Chinese, Spanish |
| Launched | 1995 |
Amazon.com, Inc. (NASDAQ: AMZN) is an American multinational electronic commerce company with headquarters in Seattle, Washington, United States. It is the world's largest online retailer.[3] Amazon has separate websites for the following countries: United States, Canada, United Kingdom, Germany, France, Italy, Spain, Japan, and China. It is also expected to launch its websites in Netherlands, Sweden, Russia, Mexico and India.[4] It also provides international shipping to certain countries for some of its products.
Jeff Bezos founded Amazon.com, Inc. in 1994, and the site went online in 1995.[5] It is named after the Amazon River, one of the largest rivers in the world.[5] Amazon.com started as an online bookstore, but soon diversified, selling DVDs, CDs, MP3 downloads, computer software, video games, electronics, apparel, furniture, food, and toys.
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Amazon was founded in 1995,[6] spurred by what Bezos called "regret minimization framework", his effort to fend off regret for not staking a claim in the Internet gold rush.[7]
The company began as an online bookstore.[8] While the largest brick-and-mortar bookstores and mail-order catalogs might offer 200,000 titles, an online bookstore could sell far more. Bezos wanted a name for his company that began with "A" so that it would appear early in alphabetic order.[5] He began looking through the dictionary and settled on "Amazon" because it was a place that was "exotic and different" and it was the river he considered the biggest in the world, as he hoped his company would be.[5] Since 2000, Amazon's logotype is an arrow leading from A to Z, representing customer satisfaction (as it forms a smile). A goal was to have every product in the alphabet.[9]
Amazon was incorporated in 1994, in the state of Washington. In July 1995, the company began service and sold its first book on Amazon.com — Douglas Hofstadter's Fluid Concepts and Creative Analogies: Computer Models of the Fundamental Mechanisms of Thought.[10] In 1996, it was reincorporated in Delaware. Amazon issued its initial public offering of stock on May 15, 1997, trading under the NASDAQ stock exchange symbol AMZN, at a price of US$18.00 per share ($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. Its "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 or 1¢ per share, on revenues of more than $1 billion. The profit, although it was modest, served to demonstrate that the business model could be profitable. In 1999, Time magazine named Bezos the Person of the Year, recognizing the company's success in popularizing online shopping.
Barnes and Noble filed a lawsuit on 12 May 1997, alleging that Amazon's claim to be "the world's largest bookstore" was false. Barnes and Noble asserted, "[It] isn't a bookstore at all. It's a book broker." The suit was later settled out of court. Amazon continued to call itself "the world's largest bookstore."[11] Walmart subsequently filed suit on 16 October 1998, alleging that Amazon had stolen trade secrets by hiring former Walmart executives. Although this suit was settled out of court, it caused Amazon to implement internal restrictions and reassignment of the former Walmart executives.[11]
The website CDNOW is managed 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 due to a lawsuit.[43] Amazon also hosted and managed the website for Borders bookstores but this ceased in 2008.[44] From its inception until August 2011, Amazon hosted the retail website for Target.[45]
Amazon.com operates retail web sites for Sears Canada, Benefit Cosmetics, bebe Stores, Timex, Marks & Spencer, Mothercare, and Lacoste. For a growing number of enterprise clients, currently including the UK merchants Marks & Spencer, Benefit Cosmetics' UK entity, edeals.com, and Mothercare, Amazon provides a unified multichannel platform where a customer can seamlessly interact with some people that they call the retail website, standalone in-store terminals, or phone-based customer service agents. Amazon Web Services also powers AOL's Shop@AOL.
On October 18, 2011, Amazon.com announced partnership with DC Comics for the exclusive digital rights to many popular comics, including Superman, Batman, Green Lantern, the Sandman, and Watchmen. The partnership has caused well-known bookstores like Barnes & Noble to remove these titles from their shelves. These titles will be available for purchase exclusively through Amazon's new Kindle Fire tablet.[46]
Amazon has offices, fulfillment centers, customer service centers and software development centers across North America, Latin America, Europe and Asia.[47]
The company's global headquarters are located in Seattle's South Lake Union neighborhood. The European headquarters are located in Luxembourg's capital Luxembourg City.
The company employs software developers in centers across the globe. While much of Amazon's software development is in Seattle, other locations include Slough (England) and Edinburgh (Scotland), Dublin (Ireland), Bangalore, Chennai, and Hyderabad (India), Cape Town (South Africa), Iaşi (Romania), Shibuya, Tokyo (Japan), Beijing (China), Orange County (United States), San Francisco (United States), Tempe (United States), and Vancouver, and Toronto (Canada).
Fulfillment centers are located in the following cities, often near airports. These centers also provide warehousing and order-fulfillment for third-party sellers:[48]
Amazon product lines include books, 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, and groceries.
The company launched amazon.com Auctions, a web auctions service, in March 1999. However, it failed to chip away at the large market share of the industry pioneer, eBay. Later, the company launched a fixed-price marketplace business, zShops, in September 1999, and the now defunct partnership with Sotheby's, called amazon.com, in November. Auctions and zShops evolved into Amazon Marketplace, a service launched in November 2000 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.
In August 2005,[61] Amazon began selling products under its own private label, "Pinzon"; the trademark applications indicated that the label would be used for textiles, kitchen utensils, and other household goods.[61] In March 2007, the company applied to expand the trademark to cover a 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".[62] Coverage by the trademark grew to include items such as paints, carpets, wallpaper, hair accessories, clothing, footwear, headgear, cleaning products, and jewelry.[62] In September 2008, Amazon filed to have the name registered. USPTO has finished its review of the application, but Amazon has yet to receive an official registration for the name.
Amazon MP3, its own online music store, launched in the US on September 25, 2007, selling downloads exclusively in MP3 format without digital rights management.[63] This was the first online offering of DRM-free music from all four major record companies.[64][65][66][67]
In August 2007, Amazon announced AmazonFresh,[68] 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.[69] 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, producing the film The Stolen Child with 20th Century Fox.[70]
Amazon's Honor System was launched in 2001 to allow customers to make donations or buy digital content, with Amazon collecting a percentage of the payment plus a fee. The service was discontinued in 2008.[71] and replaced by Amazon Payments. Amazon launched Amazon Web Services (AWS) in 2002, which provides programmatic access to latent features on its website. 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 crises such as the 9/11, Hurricane Katrina, and the 2004 earthquake and tsunami in the Indian Ocean. By January 2005, nearly 200,000 people had donated over $15.7 million in the US.[72]
Amazon Web Services (AWS) was first launched as a public beta of Amazon Elastic Compute Cloud running Microsoft Windows Server and Microsoft SQL Server.[73] This was later expanded to several operating systems including various flavors of Linux and OpenSolaris.
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 terabytes in size, can be stored in S3 and distributed via HTTP or BitTorrent. The service charges monthly fees for data stored and transferred. In 2006, Amazon introduced Amazon Simple Queue Service (Amazon SQS), a distributed queue messaging service, and product wikis (later folded into Amapedia) and discussion forums for certain products using guidelines that follow standard message board conventions. Also in 2006, Amazon introduced Amazon Elastic Compute Cloud (Amazon EC2), a virtual site farm, allowing users to use the Amazon infrastructure to run 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. Amazon introduced SimpleDB, a database system, allowing users of its other infrastructure to utilize a high reliability high performance database system. Amazon continues to refine and add services to AWS, adding such services as Scalable DNS service (Amazon Route 53), payment handling, and AWS specific APIs for their Mechanical Turk service.
Amazon Prime is a service of two-day shipping for any purchase, for a flat annual fee, as well as discounted one-day shipping rates.[74] Amazon launched the program in the contiguous United States in 2005, in Japan, the United Kingdom and Germany in 2007, and in France (as "Amazon Premium") in 2008.
Amazon Prime membership also provides instant streaming movies and TV shows at no additional cost. This is since February 2011. [75] In November 2011, it was announced that Prime members have access to the Kindle Owners’ Lending Library, which allows users to borrow certain popular titles for free, up to one book a month, with no due date.[76]
As of November 21, 2011 and through December 31, 2011, Prime members can elect for "No Rush" shipping, and receive a $1.00 Amazon MP3 credit in their account for each order that is not shipped via 1- or 2-day delivery.
Amazon Publishing is Amazon's publishing unit.[77] It is composed of AmazonEncore,[78] AmazonCrossing,[79] Montlake Romance,[80] Thomas & Mercer,[81] 47 North,[82] and Powered by Amazon. Additional imprints are planned.
Amazon's Subscribe & Save program offers a discounted price on an item (usually sold in bulk), free shipping on every Subscribe & Save shipment, automatic shipment of the item every one, two, three, or six months, with the option of canceling at any time.[83]
AmazonBasics is a private-label consumer electronics product line. It sells AV cables, blank DVD media and other electronics products under the AmazonBasics product label.[84] The line was launched in 2009.[85]
Launched in 2005, Amazon Shorts offers exclusive short stories and non-fiction pieces from best-selling authors for immediate download. By June 2007, the program had over 1,700 pieces and was adding about 50 new pieces per week. In November 2005, amazon.com began testing Amazon Mechanical Turk, an application programming interface (API) allowing programs to dispatch tasks to human processors.
In 2007, Amazon launched Amapedia, a now-defunct wiki for user-generated content to replace ProductWiki, the video on demand service Amazon Unbox, and Amazon MP3, which sells downloadable MP3s.[86] Amazon's terms of use agreements restrict use of the MP3s, but Amazon does not use DRM to enforce those terms.[87] Amazon MP3 sells music from the Big 4 record labels EMI, Universal, Warner Bros. Records, and Sony BMG, as well as independents. Prior to the launch of this service, Amazon made an investment in Amie Street, a music store with a variable pricing model based on demand.[88] Also in 2007, Amazon launched Amazon Vine, which allows reviewers free access to pre-release products from vendors in return for posting a review, as well as payment service specifically targeted at developers, Amazon FPS. In November 2007, Amazon launched Amazon Kindle, an e-book reader which downloads content over "Whispernet", via the Sprint Nextel EV-DO wireless network. The screen uses E Ink technology to reduce battery consumption to provide a more legible display. As of March 2011, the stated library numbers over 850,000 titles. In December 2007, In August 2007, Amazon launched an invitation-only beta-test for online grocery delivery. It has since rolled out in several Seattle, Washington suburbs.
In September 2011, Amazon announced its entry into the tablet computer market by introducing the Kindle Fire, which runs a customized version of the operating system Android. The aggressively low pricing of Fire ($199 USD) was largely perceived as a strategy backed by Amazon's revenue from its content sales, to be stimulated by sales of Fire.
In January 2008, Amazon began rolling out its MP3 service to subsidiary websites worldwide.[89] In December 2008, Amazon MP3 was made available in the UK. In September, IMDB and Amazon launched a Web site for browsing music metadata with wiki-like user contribution.[90] In November, Amazon partnered with Fisher-Price, Mattel, Microsoft and Transcend to offer products with minimal packaging to reduce environmental impact and frustration with opening "clamshell" type packaging.[68] Amazon Connect enables authors to post remarks on their book pages to customers. Amazon Web Store allows businesses to create custom e-commerce websites using Amazon technology. Sellers pay a commission of 7%, including credit-card processing fees and fraud protection, and a subscription fee which ranges from $0 to $24.99 per month depending on the bundle option for an unlimited number of webstores and listings.
In July 2010, Amazon announced that e-book sales for its Kindle reader outnumbered sales of hardcover books for the first time ever during the second quarter of 2010. Amazon claims that, during that period, 143 e-books were sold for every 100 hardcover books, including hardcovers for which there is no digital edition; and during late June and early July sales rose to 180 digital books for every 100 hardcovers.[91]
In 2011, Amazon announced that it was releasing a Mac download store in order to offer dozens of games and hundreds of pieces of software for Apple computers. [92]
An Amazon.com exclusive is a product, usually a DVD, that is available exclusively on Amazon.com. Some DVDs are produced by the owner of the film/product, while others are produced by Amazon.com, itself. The DVDs produced by Amazon are made using their Createspace program, in which DVDs are created once ordered using DVD-R technology. The DVDs are then shipped about two days later. Some DVDs (such as the Jersey Shore Season 1 or The Unusuals Season 1) first release their DVD on Amazon as an Amazon.com Exclusive for a limited time before being released elsewhere. On May 23, 2011, Amazon.com allowed customers to download Lady Gaga's Born This Way album for $0.99, resulting in some downloads being delayed due to an extremely high volume of downloads. [93]
The domain amazon.com attracted at least 615 million visitors annually by 2008, twice the number of walmart.com.[94] Amazon attracts approximately 65 million customers to its U.S. website per month.[95] The company has also invested heavily on a massive amount of server capacity for its website, especially to handle the excessive traffic during the December Christmas holiday season.[96] There are different versions of the website for different countries, such as amazon.co.uk, amazon.fr, amazon.de, amazon.it, amazon.at, amazon.jp, amazon.ca, amazon.es. These sites vary in assortment and prices.
Amazon allows users to submit reviews to the web page of each product. Reviewers must rate the product on a rating scale from one to five stars. As with most rating scales, one star stands for the product being abysmal, five stars meaning that the item is stellar. Amazon provides a badging option for reviewers which indicate the real name of the reviewer (based on confirmation of a credit card account) or which indicate that the reviewer is one of the top reviewers by popularity. Customers may comment or vote on the reviews, indicating whether or not they found it helpful to them. If a review is given enough "helpful" hits, it appears on the front page of the product. A problem has been created by Amazon's habit of copying reviews onto pages on other editions of the 'same' book. But often the book is not the 'same' at all. Currently (Nov. 2011) editions of the new translation of the Roman Missal are accompanied on both amazon.com and amazon.co.uk by old reviews of the old translation, many of which advise the purchaser to wait till the new translation appears, and discuss details of content and presentation that have nothing to do with the new edition.
"Search Inside the Book" is a feature which allows customers to search for keywords in the full text of many books in the catalog.[97][98] The feature started with 120,000 titles (or 33 million pages of text) on October 23, 2003.[99] There are currently about 300,000 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. Instead, it returns a picture of the matching page, disables printing, and puts limits on the number of pages in a book a single user can access. Additionally, customers can purchase online access to some of the same books via the "Amazon Upgrade" program.
Amazon derives about 40% of its sales from affiliate marketing called "Amazon Associates" and third-party sellers who sell products on Amazon. Associates receive a commission for referring customers to Amazon by placing links on their websites to Amazon, if the referral results in a sale. Worldwide, Amazon has "over 900,000 members" in its affiliate programs.[100] Amazon reported over 1.3 million sellers sold products through Amazon's World Wide Web sites in 2007. Unlike eBay, Amazon sellers do not have to maintain separate payment accounts; all payments are handled by Amazon.
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 another website, or linked to another website. In June 2010, Amazon Seller Product Suggestions was launched (rumored to be internally called "Project Genesis") to provide more transparency to sellers by recommending specific products to third-party sellers to sell on Amazon. Products suggested are based on customers' browsing history.[101]
A January 2010 survey of third-party sellers by Auctionbytes.com [102] found that Amazon was 4th overall.[103] Amazon.com placed second in "Profitability". Its lowest rating, but still above average, was in "Ease of Use". Sellers felt it had clearly defined rules, provided a steady stream of traffic to their listings, and put less emphasis on a community component. Amazon came in second in the Recommended Selling Venue category.
The Amazon sales rank (ASR) provides an indication of the popularity of a product sold on any Amazon locale. It is a relative indicator of popularity that is updated hourly. Effectively, it is a "best sellers list" for the millions of products stocked by Amazon.[104] While the ASR has no direct effect on the sales of a product, it is used by Amazon to determine which products to include in their best sellers lists.[104] Products that appear in these lists enjoy additional exposure on the Amazon website and this may lead to an increase in sales. In particular, products that experience large jumps (up or down) in their sales ranks may be included within Amazon's lists of "movers and shakers" and this also provides additional exposure that may lead to an increase in sales.[105] For competitive reasons, Amazon does not release actual sales figures to the public. However, Amazon, has now begun to release point of sale data via the Nielsen BookScan service to verified authors.[106] While the ASR has been the source of much speculation by publishers, manufacturers and marketers, Amazon itself does not release the details of its sales rank calculation algorithm. In addition, it states:
Please keep in mind that our sales rank figures are simply meant to be a guide of general interest for the customer and not definitive sales information for publishers - we assume you have this information regularly from your distribution sources
Since its founding, the company has attracted criticism and controversy from multiple sources over its actions. These include: rewarding customers for spying on Amazon's brick and mortar competitors [107], "brutal" warehouse conditions for workers more than 15 workers hospitalized for heat exposure, summary terminations for breast cancer and other health issues, and other allegations; these reports centered on in its warehouses in Breinigsville, PA; there have also been lesser complaints at its facility in Marston Gate, UK, in 2001, which resurfaced in 2008 with fresh reports of "sweatshop conditions" for workers in the UK. Amazon has also been controversial for avoiding and opposing sales tax collection duties; anti-unionization efforts; Amazon Kindle remote content removal; taking public subsidies; its "1-Click patent" claims; anti-competitive actions; price discrimination; various decisions over whether to censor or publish content such as the WikiLeaks web site; LGBT book sales rank; and works containing libel, facilitating dogfight, cockfight, or pedophile activities. In December 2011 Amazon, faced backlash from small businesses for running a one-day deal to promote its new Price Check app. Shoppers who used the app to check prices in a brick-and-mortar store were offered a 5% discount to purchase the same item from Amazon.[108] Companies like Groupon, Ebay, and Taap.it countered Amazon's promotion by offering $10 off from their products. [109] [110]
Amazon collects sales tax from just five states in the US. Amazon is under increasing legal and political pressure from state governments, traditional retailers and other groups because of its refusal to collect sales tax in 40 of the 45 states with a statewide sales tax (as of May, 2011). Those 40 states include at least 12 where Amazon has a clear physical presence[111] via distribution centers and wholly owned subsidiaries. Critics of Amazon argue that its refusal to collect sales taxes has given it an unfair advantage over traditional retailers. While customers are required to remit use tax directly to their state, few customers do so.
Amazon has said since at least 2006 that it would support a federal solution to the sales tax problem as long as such legislation was fair and simple. The Main Street Fairness Act failed in committee in 2010 and several earlier versions of the bill failed to advance. Amazon lobbyists met four times with members of Congress or their aides in 2010 regarding the Main Street Fairness Act. The company spent $610,000 on lobbying in 2010, although these expenses also covered other bills discussed at the same time. Amazon has increased political contributions to federal lawmakers. Amazon's political action committee spent $214,000 during the 2010 election cycle, double what it spent for the 2008 elections.[112]
Small business advocates at the American Independent Business Alliance note that while proclaiming support for reform, Amazon has lobbied to apply sales tax collection duties to all businesses with $150,000 or more in annual sales.[113] Since all major proposals include an exemption of at least $500,000 or $1 million, AMIBA says[111] this amounts to opposing passage of tax reform.
Amazon.com lobbies the federal government and state governments on issues such as the enforcement of sales taxes on online sales, transportation safety, privacy and data protection, and intellectual property. According to regulatory filings Amazon.com focuses its lobbying on the US Congress, the Federal Communications Commission, and the Federal Reserve. Amazon.com spent $450,000 on lobbying during the second quarter of 2011, $630,000 in the first quarter of 2011, and $500,000 during the second quarter of 2010.[114]
A number of companies have been started and founded by former Amazon.com employees.[115]
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