Amazon.com, Inc. (NASDAQ: AMZN) is a US-based multinational electronic commerce company. Headquartered in Seattle, Washington, it is the largest online retailer in the United States, with nearly three times the Internet sales revenue of the runner up, Staples, Inc., as of January 2010.
Jeff Bezos founded Amazon.com, Inc. in 1994 and the site went online in 1995. The company was originally named Cadabra, Inc., but the name was changed when it was discovered that people sometimes heard the name as "Cadaver". The name Amazon.com was chosen because the Amazon River is one of the largest rivers in the world and so the name suggests large size, and also in part because it starts with "A" and therefore would show up near the beginning of alphabetical lists. 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. Amazon has established separate websites in Canada, the United Kingdom, Germany, France, Italy, Japan, and China. It also provides international shipping to certain countries for some of its products.
Amazon.com, Inc. , incorporated in 1994, is a customer-centric company for three primary customer sets: consumers, sellers and enterprises. In addition, the Company generates revenue through other marketing and promotional services, such as online advertising, and co-branded credit card agreements. The Company operates in two segments: North America and International. The Company serves consumers through its retail Websites, and focus on selection, price, and convenience. It designs its Websites to enable products to be sold by it and by third parties across dozens of product categories. It also manufactures and sells the Kindle e-reader. It offers customers membership in Amazon Prime. It also provides easy-to-use functionality, fulfillment and customer service. It fulfills customer orders in a range of ways, including through the United States and international fulfillment centers and warehouses that it operates, through co-sourced and outsourced arrangements in certain countries, and through digital delivery. It operates customer service centers globally, which are supplemented by co-sourced arrangements. In February 2010, the Company acquired Touchco, a touch screen technology company.
The Company offers programs that enable sellers to sell their products on its Websites and their own branded Websites and to fulfill orders through it. It earns fixed fees, revenue share fees, per-unit activity fees, or some combination thereof from these transactions. The Company serves developers and enterprises of all sizes through Amazon Web Services (AWS), which provides access to technology infrastructure that enables any type of business.
North America
International
The International segment consists of amounts earned from retail sales of consumer products, including from sellers and subscriptions through internationally focused locations. This segment includes export sales from these internationally based locations, including export sales from these sites to customers in the United States and Canada, but excludes export sales from it’s the United States and Canadian locations.
After less than two years of operation, Amazon.com became a public company in May 1997 with an initial public offering (IPO) of three million shares of common stock. With the proceeds from the IPO, Bezos went to work on improving the already productive web site and on bettering the company's distribution capabilities.
To help broaden the company's distribution capabilities, and to ease the strain on the existing distribution center that came from such a high volume of orders, in September 1997 Bezos announced that Amazon.com would be opening an East Coast distribution center in New Castle, Delaware. There was also a 70 percent expansion of the company's Seattle center. The improvements increased the company's stocking and shipping capabilities and reduced the time it took to fill customers' orders. The Delaware site not only got Amazon.com closer to East Coast customers, but also to East Coast publishers, which decreased Amazon.com's receiving time. With the new centers in place, Bezos set a goal for the company of 95 percent same-day shipping of in-stock orders, getting orders to the customers much faster than before.
Another growth area for Amazon.com was the success of its "Associate' program. Established in July 1996, the program allowed individuals with their own web sites to choose books of interest and place ads for them on their own sites, allowing visitors to purchase those books. The customer was linked to Amazon.com, which took care of all the orders. Associates were sent reports on their sales and made a 3 to 8 percent commission from books sold on their sites. The Associates program really began to take off in mid-1997, when Amazon.com formed partnerships with Yahoo, Inc. and America Online, Inc. Both companies agreed to give Amazon.com broad promotional capabilities on their sites, two of the most visited sites on the Web. As the success continued, Amazon also struck deals with many other popular sites, including Netscape, GeoCities, Excite, and AltaVista.
As the company continued to grow in 1997, Bezos announced in October that Amazon.com would be the first Internet retailer to reach the milestone of one million customers. With customers in all 50 states and now 160 countries worldwide, what had started in a Seattle garage was now a company with $147.8 million in yearly sales.
Further Expansion in 1998
As Amazon.com ventured into 1998, the company continued to grow. By February, the Associates program had reached 30,000 members, who now earned up to 15 percent for recommending and selling books from their web sites. Four months later, the number of Associates had doubled to 60,000.
The company's customer database continued to grow as well, with cumulative customer accounts reaching 2.26 million in March, an increase of 50 percent in just three months, and of 564 percent over the previous year. In other words, it took Amazon.com 27 months to serve its first million customers and only six months to serve the second million. This feat made Amazon.com the third largest bookseller in the United States.
Financed by a $75 million credit facility secured in late 1997, Amazon.com continued to reshape its services in 1998. To its catalog of over 2.5 million titles, the company added Amazon.com Advantage, a program to help the sales of independent authors and publishers, and Amazon.com Kids, a service providing over 100,000 titles for younger children and teenagers.
Amazon.com also expanded its business through a trio of acquisitions in early 1998. Two of the companies were acquired to further expand Amazon.com's business into Europe. Bookpages, one of the largest online booksellers in the United Kingdom, gave Amazon.com access to the U.K. market. Telebook, the largest online bookseller in Germany, added its German titles to the mix. Both companies not only gave Amazon .com access to new customers in Europe, but it also gave existing Amazon.com customers access to more books from around the world. The Internet Movie Database (IMD), the third acquisition, was used to support plans for its move into online video sales. The tremendous resources and information of the IMD served as a valuable asset in the construction of a customer-friendly and informative web site for video sales.
Another big change in 1998 was the announcement of the company's decision to enter into the online music business. Bezos again wanted to make the site as useful as possible for his customers, so he appealed to them for help. Several months before officially opening its music site, Amazon.com asked its bookstore customers and members of the music profession to help design the new web site.
The music store opened in June 1998, with over 125,000 music titles available. The new site, which began operations at the same time that Amazon.com debuted a redesigned book site, offered many of the same helpful services available at the company's book site. The database was searchable by artist, song title, or label, and customers were able to listen to more than 225,000 sound clips before making their selection.
Amazon.com ended the second quarter of 1998 as strong as ever. Cumulative customer accounts broke the three million mark, and as sales figures for Amazon.com continued to rise, and more products and titles were added, the future looked bright for this pioneer in the Internet commerce marketplace. With music as a part of the company mix, and video sales on the horizon, Bezos seemed to have accomplished his goal of gathering a strong market share in the online sales arena. As Bezos told Fortune magazine in December 1996: "By the year 2000, there could be two or three big online bookstores. We need to be one of them."
Growth Continues: 1999 and Beyond
As such, the company's focus on growth continued. In 1999, it launched an online auction service entitled Amazon Auctions. It also began offering toys and electronics and then divided its product offerings into individual stores on its site to make it easier for customers to shop for certain items. During the holiday season that year, the firm ordered 181 acres of holiday wrapping paper and 2,494 miles of red ribbon, a sign that Bezos expected holiday shoppers to flock to his site as they had in the two past years. Sure enough, sales climbed to $1.6 billion proving that the founder's efforts to create an online powerhouse had indeed paid off. In 1999, Bezos reached the upper echelon of the corporate world when Time magazine honored him with its prestigious "Person of the Year" award.
While Amazon.com's growth story was remarkable, Bezos' focus on market share over profits had made Wall Street uneasy and left analysts speculating whether the company would ever be able to turn a profit. Sales continued to grow as the company added new products to its site--including lawn and patio furniture and kitchen wares. The company however, continued to post net losses. To top it off, the "dot-com boom" of the late 1990s came to a crashing halt in the early years of the new millenium as many startups declared bankruptcy amid intense competition and weakening economies.
Bezos remained optimistic, even as Amazon.com's share price faltered. During 2001, the company focused on cutting costs. It laid off 1,300 employees and closed a distribution facility. The company also added price reduction to its business strategy, which had traditionally been centered on vast selection and convenience. Amazon.com inked lucrative third-party deals with such well-known retailers as Target Corporation and America Online, Inc. By now, products from Toysrus.com Inc., Circuit City Stores Inc., the Borders Group, and a host of other retailers were available on the Amazon.com site.
Amazon.com's strategy worked. In 2001, sales grew to $3.12 billion, an increase of 13 percent over the previous year. During the fourth quarter, Amazon.com reached a milestone that many had regarded as unlikely; it secured a net profit of $5 million. In 2002, the company launched its apparel store, which included clothing from retailers The Gap and Lands' End. Overall, the company reported a net loss of $149 million for the year, an improvement from the $567 million loss reported in 2001. In the fourth quarter of 2002 however, the firm secured a quarterly net profit of $3 million--the second net profit in its history.
While securing quarterly net profits was a major turning point for the young company, a July 2002 Business Week article warned, "after seven years and more than $1 billion in losses, Amazon is still a work in process." Indeed, the company's foray into providing the "Earth's Biggest Selection" had yet to prove it could provide profits on a long-term basis. Nevertheless, Bezos and his Amazon team remained confident that the firm was on the right track. With $3.9 billion in annual sales, Amazon.com had without a doubt come a long way from its start as an online book seller.
Principal Subsidiaries: Amazon Global Resources, Inc.; Amazon.com.dedc, LLC; Fulfillco.ksdc, Inc.; Amazon.com.kydc, Inc.; Amazon.com Commerce Services, Inc.; Amazon.com Holdings, Inc.; Amazon.com International Sales, Inc.; Amazon.com LLC; Amazon.com Payments, Inc.; NV Services, Inc.; Amazon Fulfillment Services, Inc.;
Principal Competitors: Barnes & Noble Inc.; CDNow Inc.; eBay Inc.
OVERALL
Beta: 1.17
Market Cap (Mil.): $88,180.04
Shares Outstanding (Mil.): 452.04
Annual Dividend: --
Yield (%): --
FINANCIALS
AMZN.O Industry Sector
P/E (TTM): 84.53 31.28 13.70
EPS (TTM): 0.96 -- --
ROI: 13.27 9.95 1.27
ROE: 16.27 15.71 2.12
Statistics:
Public Company
Incorporated:1997
Employees: 7,800
Sales:$3.9 billion (2002)
Stock Exchanges:NASDAQ
Ticker Symbol:AMZN
NAIC:45411 Electronic Shopping and Mail-Order Houses
Key Dates:
1995: Amazon.com debuts on the Web.
1997: The company goes public; Amazon.com becomes the first Internet retailer to secure one million customers.
1998: Amazon.com enters the online music and video business; companies are acquired in the United Kingdom and Germany.
1999: The firm expands into selling toys, electronics, tools, and hardware; Bezos is named Time Magazine's "Person of the Year."
2001: Amazon.com reports its first net profit during the fourth quarter.
Name Age Since Current Position
Bezos, Jeffrey 47 2000 Chairman of the Board, President, Chief Executive Officer
Szkutak, Thomas 50 2002 Chief Financial Officer, Senior Vice President
Wilson, L. Michelle 47 2003 Senior Vice President, General Counsel, Secretary
Wilke, Jeffrey 44 2007 Senior Vice President - North America Retail
Piacentini, Diego 50 2007 Senior Vice President - International Retail
Blackburn, Jeffrey 41 2006 Senior Vice President - Business Development
Jassy, Andrew 43 2006 Senior Vice President - Web Services
Kessel, Steven 45 2006 Senior Vice President - Worldwide Digital Media
Onetto, Marc 60 2006 Senior Vice President - Worldwide Operations
Valentine, H. Brian 51 2006 Senior Vice President - Ecommerce Platform
Gunningham, Sebastian 48 2007 Senior Vice President - Seller Services
Reynolds, Shelley 46 2007 Vice President, Worldwide Controller, Principal Accounting Officer
Ryder, Thomas 66 Lead Director
Alberg, Tom 70 1996 Director
Stonesifer, Patricia 54 1997 Director
Gordon, William 60 2003 Director
Brown, John 70 2004 Director
Monie, Alain 60 2008 Director
Rubinstein, Jonathan 54 2010 Director
Address:
1200 12th Avenue, Suite 1200
Seattle, Washington 98114
U.S.A.
Jeff Bezos founded Amazon.com, Inc. in 1994 and the site went online in 1995. The company was originally named Cadabra, Inc., but the name was changed when it was discovered that people sometimes heard the name as "Cadaver". The name Amazon.com was chosen because the Amazon River is one of the largest rivers in the world and so the name suggests large size, and also in part because it starts with "A" and therefore would show up near the beginning of alphabetical lists. 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. Amazon has established separate websites in Canada, the United Kingdom, Germany, France, Italy, Japan, and China. It also provides international shipping to certain countries for some of its products.
Amazon.com, Inc. , incorporated in 1994, is a customer-centric company for three primary customer sets: consumers, sellers and enterprises. In addition, the Company generates revenue through other marketing and promotional services, such as online advertising, and co-branded credit card agreements. The Company operates in two segments: North America and International. The Company serves consumers through its retail Websites, and focus on selection, price, and convenience. It designs its Websites to enable products to be sold by it and by third parties across dozens of product categories. It also manufactures and sells the Kindle e-reader. It offers customers membership in Amazon Prime. It also provides easy-to-use functionality, fulfillment and customer service. It fulfills customer orders in a range of ways, including through the United States and international fulfillment centers and warehouses that it operates, through co-sourced and outsourced arrangements in certain countries, and through digital delivery. It operates customer service centers globally, which are supplemented by co-sourced arrangements. In February 2010, the Company acquired Touchco, a touch screen technology company.
The Company offers programs that enable sellers to sell their products on its Websites and their own branded Websites and to fulfill orders through it. It earns fixed fees, revenue share fees, per-unit activity fees, or some combination thereof from these transactions. The Company serves developers and enterprises of all sizes through Amazon Web Services (AWS), which provides access to technology infrastructure that enables any type of business.
North America
International
The International segment consists of amounts earned from retail sales of consumer products, including from sellers and subscriptions through internationally focused locations. This segment includes export sales from these internationally based locations, including export sales from these sites to customers in the United States and Canada, but excludes export sales from it’s the United States and Canadian locations.
After less than two years of operation, Amazon.com became a public company in May 1997 with an initial public offering (IPO) of three million shares of common stock. With the proceeds from the IPO, Bezos went to work on improving the already productive web site and on bettering the company's distribution capabilities.
To help broaden the company's distribution capabilities, and to ease the strain on the existing distribution center that came from such a high volume of orders, in September 1997 Bezos announced that Amazon.com would be opening an East Coast distribution center in New Castle, Delaware. There was also a 70 percent expansion of the company's Seattle center. The improvements increased the company's stocking and shipping capabilities and reduced the time it took to fill customers' orders. The Delaware site not only got Amazon.com closer to East Coast customers, but also to East Coast publishers, which decreased Amazon.com's receiving time. With the new centers in place, Bezos set a goal for the company of 95 percent same-day shipping of in-stock orders, getting orders to the customers much faster than before.
Another growth area for Amazon.com was the success of its "Associate' program. Established in July 1996, the program allowed individuals with their own web sites to choose books of interest and place ads for them on their own sites, allowing visitors to purchase those books. The customer was linked to Amazon.com, which took care of all the orders. Associates were sent reports on their sales and made a 3 to 8 percent commission from books sold on their sites. The Associates program really began to take off in mid-1997, when Amazon.com formed partnerships with Yahoo, Inc. and America Online, Inc. Both companies agreed to give Amazon.com broad promotional capabilities on their sites, two of the most visited sites on the Web. As the success continued, Amazon also struck deals with many other popular sites, including Netscape, GeoCities, Excite, and AltaVista.
As the company continued to grow in 1997, Bezos announced in October that Amazon.com would be the first Internet retailer to reach the milestone of one million customers. With customers in all 50 states and now 160 countries worldwide, what had started in a Seattle garage was now a company with $147.8 million in yearly sales.
Further Expansion in 1998
As Amazon.com ventured into 1998, the company continued to grow. By February, the Associates program had reached 30,000 members, who now earned up to 15 percent for recommending and selling books from their web sites. Four months later, the number of Associates had doubled to 60,000.
The company's customer database continued to grow as well, with cumulative customer accounts reaching 2.26 million in March, an increase of 50 percent in just three months, and of 564 percent over the previous year. In other words, it took Amazon.com 27 months to serve its first million customers and only six months to serve the second million. This feat made Amazon.com the third largest bookseller in the United States.
Financed by a $75 million credit facility secured in late 1997, Amazon.com continued to reshape its services in 1998. To its catalog of over 2.5 million titles, the company added Amazon.com Advantage, a program to help the sales of independent authors and publishers, and Amazon.com Kids, a service providing over 100,000 titles for younger children and teenagers.
Amazon.com also expanded its business through a trio of acquisitions in early 1998. Two of the companies were acquired to further expand Amazon.com's business into Europe. Bookpages, one of the largest online booksellers in the United Kingdom, gave Amazon.com access to the U.K. market. Telebook, the largest online bookseller in Germany, added its German titles to the mix. Both companies not only gave Amazon .com access to new customers in Europe, but it also gave existing Amazon.com customers access to more books from around the world. The Internet Movie Database (IMD), the third acquisition, was used to support plans for its move into online video sales. The tremendous resources and information of the IMD served as a valuable asset in the construction of a customer-friendly and informative web site for video sales.
Another big change in 1998 was the announcement of the company's decision to enter into the online music business. Bezos again wanted to make the site as useful as possible for his customers, so he appealed to them for help. Several months before officially opening its music site, Amazon.com asked its bookstore customers and members of the music profession to help design the new web site.
The music store opened in June 1998, with over 125,000 music titles available. The new site, which began operations at the same time that Amazon.com debuted a redesigned book site, offered many of the same helpful services available at the company's book site. The database was searchable by artist, song title, or label, and customers were able to listen to more than 225,000 sound clips before making their selection.
Amazon.com ended the second quarter of 1998 as strong as ever. Cumulative customer accounts broke the three million mark, and as sales figures for Amazon.com continued to rise, and more products and titles were added, the future looked bright for this pioneer in the Internet commerce marketplace. With music as a part of the company mix, and video sales on the horizon, Bezos seemed to have accomplished his goal of gathering a strong market share in the online sales arena. As Bezos told Fortune magazine in December 1996: "By the year 2000, there could be two or three big online bookstores. We need to be one of them."
Growth Continues: 1999 and Beyond
As such, the company's focus on growth continued. In 1999, it launched an online auction service entitled Amazon Auctions. It also began offering toys and electronics and then divided its product offerings into individual stores on its site to make it easier for customers to shop for certain items. During the holiday season that year, the firm ordered 181 acres of holiday wrapping paper and 2,494 miles of red ribbon, a sign that Bezos expected holiday shoppers to flock to his site as they had in the two past years. Sure enough, sales climbed to $1.6 billion proving that the founder's efforts to create an online powerhouse had indeed paid off. In 1999, Bezos reached the upper echelon of the corporate world when Time magazine honored him with its prestigious "Person of the Year" award.
While Amazon.com's growth story was remarkable, Bezos' focus on market share over profits had made Wall Street uneasy and left analysts speculating whether the company would ever be able to turn a profit. Sales continued to grow as the company added new products to its site--including lawn and patio furniture and kitchen wares. The company however, continued to post net losses. To top it off, the "dot-com boom" of the late 1990s came to a crashing halt in the early years of the new millenium as many startups declared bankruptcy amid intense competition and weakening economies.
Bezos remained optimistic, even as Amazon.com's share price faltered. During 2001, the company focused on cutting costs. It laid off 1,300 employees and closed a distribution facility. The company also added price reduction to its business strategy, which had traditionally been centered on vast selection and convenience. Amazon.com inked lucrative third-party deals with such well-known retailers as Target Corporation and America Online, Inc. By now, products from Toysrus.com Inc., Circuit City Stores Inc., the Borders Group, and a host of other retailers were available on the Amazon.com site.
Amazon.com's strategy worked. In 2001, sales grew to $3.12 billion, an increase of 13 percent over the previous year. During the fourth quarter, Amazon.com reached a milestone that many had regarded as unlikely; it secured a net profit of $5 million. In 2002, the company launched its apparel store, which included clothing from retailers The Gap and Lands' End. Overall, the company reported a net loss of $149 million for the year, an improvement from the $567 million loss reported in 2001. In the fourth quarter of 2002 however, the firm secured a quarterly net profit of $3 million--the second net profit in its history.
While securing quarterly net profits was a major turning point for the young company, a July 2002 Business Week article warned, "after seven years and more than $1 billion in losses, Amazon is still a work in process." Indeed, the company's foray into providing the "Earth's Biggest Selection" had yet to prove it could provide profits on a long-term basis. Nevertheless, Bezos and his Amazon team remained confident that the firm was on the right track. With $3.9 billion in annual sales, Amazon.com had without a doubt come a long way from its start as an online book seller.
Principal Subsidiaries: Amazon Global Resources, Inc.; Amazon.com.dedc, LLC; Fulfillco.ksdc, Inc.; Amazon.com.kydc, Inc.; Amazon.com Commerce Services, Inc.; Amazon.com Holdings, Inc.; Amazon.com International Sales, Inc.; Amazon.com LLC; Amazon.com Payments, Inc.; NV Services, Inc.; Amazon Fulfillment Services, Inc.;
Principal Competitors: Barnes & Noble Inc.; CDNow Inc.; eBay Inc.
OVERALL
Beta: 1.17
Market Cap (Mil.): $88,180.04
Shares Outstanding (Mil.): 452.04
Annual Dividend: --
Yield (%): --
FINANCIALS
AMZN.O Industry Sector
P/E (TTM): 84.53 31.28 13.70
EPS (TTM): 0.96 -- --
ROI: 13.27 9.95 1.27
ROE: 16.27 15.71 2.12
Statistics:
Public Company
Incorporated:1997
Employees: 7,800
Sales:$3.9 billion (2002)
Stock Exchanges:NASDAQ
Ticker Symbol:AMZN
NAIC:45411 Electronic Shopping and Mail-Order Houses
Key Dates:
1995: Amazon.com debuts on the Web.
1997: The company goes public; Amazon.com becomes the first Internet retailer to secure one million customers.
1998: Amazon.com enters the online music and video business; companies are acquired in the United Kingdom and Germany.
1999: The firm expands into selling toys, electronics, tools, and hardware; Bezos is named Time Magazine's "Person of the Year."
2001: Amazon.com reports its first net profit during the fourth quarter.
Name Age Since Current Position
Bezos, Jeffrey 47 2000 Chairman of the Board, President, Chief Executive Officer
Szkutak, Thomas 50 2002 Chief Financial Officer, Senior Vice President
Wilson, L. Michelle 47 2003 Senior Vice President, General Counsel, Secretary
Wilke, Jeffrey 44 2007 Senior Vice President - North America Retail
Piacentini, Diego 50 2007 Senior Vice President - International Retail
Blackburn, Jeffrey 41 2006 Senior Vice President - Business Development
Jassy, Andrew 43 2006 Senior Vice President - Web Services
Kessel, Steven 45 2006 Senior Vice President - Worldwide Digital Media
Onetto, Marc 60 2006 Senior Vice President - Worldwide Operations
Valentine, H. Brian 51 2006 Senior Vice President - Ecommerce Platform
Gunningham, Sebastian 48 2007 Senior Vice President - Seller Services
Reynolds, Shelley 46 2007 Vice President, Worldwide Controller, Principal Accounting Officer
Ryder, Thomas 66 Lead Director
Alberg, Tom 70 1996 Director
Stonesifer, Patricia 54 1997 Director
Gordon, William 60 2003 Director
Brown, John 70 2004 Director
Monie, Alain 60 2008 Director
Rubinstein, Jonathan 54 2010 Director
Address:
1200 12th Avenue, Suite 1200
Seattle, Washington 98114
U.S.A.