Amazon is a multinational technology company, founded and headquartered in Seattle, Washington, in 1994. The company focuses on various services, including e-commerce, cloud computing, digital streaming, and artificial intelligence (AI). Amazon is considered one of the Big Five information technology companies in the United States alongside Microsoft, Apple, Google, and Facebook. Amazon was referred to as the "most valuable brand" in the world by PR Newswire in 2019.
Amazon is best known for its disruption of well-established industry giants through technological innovation at mass scale. As of 2020, Amazon was the world's largest online marketplace, AI assistant provider, live-streaming platform, and cloud computing platform when measured by recurring revenue and market capitalization. Additionally, Amazon was the largest internet company in the world, when measured by revenue, and was the second-largest private employer in the United States as of 2020.
Amazon distributes products like downloads and streaming of video, music, and audiobooks through its Prime Video, Amazon Music, Twitch, and Audible subsidiaries. Additionally, Amazon has its own publishing company, Amazon Publishing; a film and television studio, Amazon Studios; and a cloud computing subsidiary, Amazon Web Services. The company has developed and produced various electronic devices, including Kindle e-readers, Fire tablets, Fire TV, and Echo devices. Amazon has made multiple acquisitions over the years, including Ring security, Twitch, Whole Foods Market, and IMDb.
Amazon was initially founded in 1994 by Jeff Bezos as Cadabra, Inc. It was developed as a result of what Bezos called his “regret minimization framework,” which was a description of his efforts to avoid regrets regarding late participation in the internet business boom that occurred in the mid-1990s. Bezos left his position as vice-president of D.E. Shaw & Co., a Wall Street investment firm, in 1994 and moved to Seattle to build the business plan for what would initially be named Cadabra, but would become Amazon in 1995. Bezos decided to change the company name after a lawyer mistook the name Cadabra for “cadaver.”
In the early days of founding and planning, Bezos operated the company out of his home on Northeast 28th St in Bellvue, Washington. In September of 1994, he purchased the domain name relentless.com with a short-lived plan to rename his online retail platform Relentless. Still, close confidants advised Bezos the name might have a negative connotation. Bezos still owns the domain relentless.com, which redirects traffic to the Amazon.com homepage.
Bezos chose the name for Amazon by leafing through a dictionary. He settled on “Amazon” because he viewed it as a place that was “exotic and different,” which aligned with his vision for the internet enterprise. Bezos noted in an interview that the Amazon River was the largest globally and that he intended to run the largest bookstore in the world.
After reading a report about the future of the internet that projected annual web commerce growth at 2,300%, Bezos developed a list of potential products that could be marketed online. After contemplation, he narrowed the list to five products he felt were most promising before finally settling on books due to the global demand for literature, low unit prices, and the volume of titles available in print. At this point, Amazon was officially founded in the garage of Bezos’ Bellevue rental-home with his parents providing the initial investment of just under $250,000.
In July of 1995, Amazon officially launched its service as an online book retailer. The first book to ever be sold by Amazon was Fluid Concepts and Creative Analogies: Computer Models of the Fundamental Mechanisms of Thought by Douglas Hofstadter. Within the first two months of operation, Amazon had sold books to all 50 states and over 45 countries, and sales were totaling up to $20,000 per week. By October 1995, the company announced itself to the public, and in 1996, it was reincorporated in Delaware. Amazon issued its initial public offering (IPO) of stock on May 15, 199t, at $18 a share, trading on the NASDAQ with the exchange symbol AMZN.
In 1999, Amazon attempted to enter the publishing market for the first time by buying a defunct imprint, “Weathervane,” and published some books that The New Yorker said were “selected with no apparent thought.” The Weathervane imprint disappeared soon after, and as of 2014 Amazon representatives stated they had never heard of it. Additionally, in 1999, Bezos was named Person of the Year by TIME magazine.
On May 12, 1997, Barnes & Nobel sued Amazon, under the allegation that Amazon’s claim to be the “world’s largest bookstore” was false as Amazon was a book broker, not a store. Eventually, the lawsuit was settled out of court, but Amazon continued to refer to itself as the “world’s largest bookstore.”
On October 16, 1998, Amazon was sued again, this time by Walmart under the allegation that Amazon had stolen Walmart’s trade secrets by hiring former Walmart executives. This suit was also settled outside of court but resulted in Amazon implementing internal restrictions and reassigning the former Walmart execs.
In June of 2000, Amazon changed its logotype to feature a curved arrow leading from A to Z, insinuating the company carries all products A to Z. Additionally, the arrow was designed and shaped to represent a smile.
Amazon experienced slow growth, with some Amazon sources saying Amazon didn’t expect to turn a profit for four to five years. The slow growth caused stockholders to complain about the company and discuss its inability to reach profitability quickly enough to justify investments or long-term survival capability. In 2001, the dot com bubble burst was the demise of many e-commerce companies due to uncertainty and speculation of online retail. Still, Amazon survived and continued to move forward to become significant in online retail. In the fourth quarter of 2001, Amazon finally turned its first profit: $0.01 per share on revenues of more than $1 billion, proving to skeptical investors that the unconventional business plan Bezos had developed could succeed.
In 2011, Amazon had hired 56,200 employees between offices, warehouses, and data centers, but by 2017 Amazon had grown to over 566,000 employees after its acquisition of Whole Foods.
In 2014, Amazon launched the Fire Phone, a 3D-enabled smartphone developed by Amazon and manufactured by Foxconn. Originally it was announced in June of 2014 and was available for pre-order the day it was announced. The Fire Phone was Amazon’s entrance into the smartphone industry and was meant to deliver streaming options to users. Still, the launch failed, which resulted in Amazon registering $170 million in losses, which led to the Fire Phone production halting the following year.
In 2017, Amazon announced it had plans to locate a second headquarters in a metropolitan area with at least 1 million people in the population. Cities were required to submit proposals and presentations by October 19, 2017, for the project that would be called HQ2. At this time Amazon was only headquartered in Seattle in a building that had initially been 500,000 sq ft but had room for expansion up to 8 million sq ft. Amazon announced it would develop space within the building for Mary’s Place, a local charity in 2020.
On August 8, 2018, a story in Bloomberg Businessweek stated that Amazon had a 5% stake in U.S. retail spending (excluding the automotive market and restaurant industry) and a 43.5% stake in American online expenditure.
In September of 2018, Amazon launched its last-mile delivery program and ordered 20,000 Mercedes-Benz Sprinter vans for the independent delivery service to expedite shipping further. The expansion also allowed Amazon to extend shipping on Sunday. Amazon also partnered with the United States Postal Service (USPS) to offer shipping in less populated areas on Sundays as USPS is responsible for 40% of the domestic product shipping.
In November of 2018, Amazon announced it would open its new headquarters, HQ2, in Long Island City, Queens, New York City, and the Crystal City neighborhood in Arlington, Virginia. However, on February 14, 2019, Amazon announced it would not be moving forward with the Queens project and would solely focus on the Arlington, Virginia location. The company plans to staff HQ2 with at least 25,000 employees by 2030 and will invest more than $2.5 billion in the project. The announcement led to a partnership between Amazon and Virginia Tech to develop an Innovation Campus to meet high-tech talent demand.
At the end of March in 2020, some employees at the Staten Island warehouse staged a walkout in protest of the health conditions within their workplace amidst the COVID-19 pandemic. One of the organizers, Chris Smalls, was the first to be put on quarantine without other employees being quarantined. Soon after, Smalls was fired from Amazon.
Amazon boasts a wide selection of product lines on its website, including media (books, DVDs, music, CDs, videotapes, and software), apparel, consumer electronics, gourmet food, beauty products, baby products, groceries, health and personal-care items, industrial supplies, kitchen items, jewelry, watches, lawn and garden items, musical instruments, sporting goods, tools, automotive items, toys, games, and more. In 2019, Amazon applied to develop a liquor store in San Francisco, California with the means to ship beer and other spirits within city limits. Amazon has other retail websites for other countries and offers international shipping of some products. In November of 2020, Amazon developed an online delivery service dedicated to prescription medications. The service provides up to 80% off generic drugs and 40% off brand name medications for Amazon Prime subscribers. The products can be purchased on the Amazon website or at 50,000 brick-and-mortar pharmacies nationwide in the United States.
Amazon has many brands and products, but a few key products boasted more success than others such as:
Amazon Prime is the Amazon subscription that comes with benefits that are not available to customers using the platform for free. Some of the upgraded conveniences of Amazon Prime are same-day or two-day shipping; streaming movies and shows from Prime Video; music streaming from Prime Music; free e-books from Prime Reading; grocery delivery with Prime Pantry; Prime Now, which offers delivery within two hours of ordering; Amazon Key, which allows delivery people to leave packages in someone’s home, car, or garage; Prime Gaming, which is a premium Twitch streaming membership; and Prime Day, which is an annual day of Amazon product sales that was initially launched to celebrate 20 years of Amazon.
Amazon Web Services (AWS) was launched in 2002 to provide programmatic access to its website, since then it has expanded to a cloud-based computing platform with APIs for businesses and companies to host companies, individuals, or governments. Amazon Web Services initially started as an Amazon product but has become a subsidiary of Amazon, complete with its own CEO and separate operations from Amazon.com.
Amazon’s Alexa, most commonly known as Alexa, is a virtual voice-activated assistant AI. Initially, it was developed for the Amazon Echo product, but since its inception it has expanded to other products beyond the Echo. Alexa is capable of performing tasks such as changing songs, turning lights on or off, developing to-do lists, setting timers, and more.
The Kindle is a portable e-reader tablet where books can be downloaded and stored for easy access. It is compatible with downloads from various retailers including Barnes & Noble, Good Reads, and Audible.
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