Amazon.com, Inc. (NASDAQ The NASDAQ Stock Market, also known as the NASDAQ, is an American stock exchange. "NASDAQ" originally stood for "National Association of Securities Dealers Automated Quotations," but the exchange's official stance is that the acronym is obsolete. It is the largest electronic screen-based equity securities trading market in the: AMZN) is an American-based multinational A multinational corporation or transnational corporation (TNC), also called multinational enterprise (MNE), is a corporation or an enterprise that manages production or delivers services in more than one country. It can also be referred as an international corporation. The International Labour Organization (ILO) has defined[citation needed] an MNC electronic commerce Electronic commerce, commonly known as e-commerce or eCommerce, consists of the buying and selling of products or services over electronic systems such as the Internet and other computer networks. The amount of trade conducted electronically has grown extraordinarily with widespread Internet usage. The use of commerce is conducted in this way, company In the United States, a company is a corporation—or, less commonly, an association, partnership, or union—that carries on an industrial enterprise." Generally, a company may be a "corporation, partnership, association, joint-stock company, trust, fund, or organized group of persons, whether incorporated or not, and any receiver,. Headquartered in Seattle Seattle (pronounced /siːˈætəl/ see-AT-əl) is the northernmost major city in the continental United States, and the largest city in the Pacific Northwest and in the state of Washington. A seaport situated on an isthmus between Puget Sound (an arm of the Pacific Ocean) and Lake Washington, about 100 miles (160 km) south of the Canada – United, Washington Washington (pronounced /ˈwɒʃɪŋtən/ ) is a state in the Pacific Northwest region of the United States. Washington was carved out of the western part of Washington Territory which had been ceded by Britain in 1846 by the Oregon Treaty as settlement of the Oregon Boundary Dispute. It was admitted to the Union as the forty-second state in 1889, it is America's largest online retailer Online shopping is the process consumers go through to purchase products or services over the Internet. An online shop, eshop, e-store, internet shop, webshop, webstore, online store, or virtual store evokes the physical analogy of buying products or services at a bricks-and-mortar retailer or in a shopping mall, with nearly three times the Internet sales revenue of the runner up, Staples, Inc. Staples Inc. is the world's largest office supply retail store chain, with over 2,000 stores worldwide in 27 countries. Based in Framingham, Massachusetts, USA, the company has catalog and delivery businesses and serves customers in Argentina (as Officenet Staples), Austria, Belgium (as Staples Office Centre, trading to professional customers only), as of January 2010.^[3]

Jeff Bezos Jeffrey Preston "Jeff" Bezos is the founder, president, chief executive officer and chairman of the board of Amazon.com. Bezos, a Tau Beta Pi graduate of Princeton University, worked as a financial analyst for D. E. Shaw & Co. before founding Amazon in 1994 founded Amazon.com, Inc. in 1994 and launched it online in 1995 as Cadabra.com. It started as an online bookstore, but soon diversified, selling DVDs DVD, also known as Digital Video Disc or Digital Versatile Disc, is an optical disc storage media format, and was invented and developed by Philips, Sony, Toshiba, and Time Warner in 1995. Its main uses are video and data storage. DVDs are of the same dimensions as compact discs , but are capable of storing more than six times as much data, CDs A Compact Disc is an optical disc used to store digital data. It was originally developed to store sound recordings exclusively, but later it also allowed the preservation of other types of data. Audio CDs have been commercially available since October 1982. In 2010, they remain the standard physical storage medium for audio, MP3 MPEG-1 Audio Layer 3 or MPEG-2 Audio Layer 3 or MPEG-1 or 2 Audio Layer III, more commonly referred to as MP3, is a patented digital audio encoding format using a form of lossy data compression. It is a common audio format for consumer audio storage, as well as a de facto standard of digital audio compression for the transfer and playback of music downloads, computer software Computer software, or just software, is a general term primarily used for digitally stored data such as computer programs and other kinds of information read and written by computers. Today, this includes data that has not traditionally been associated with computers, such as film, tapes and records. The term was coined in order to contrast to the, video games A video game is an electronic game that involves interaction with a user interface to generate visual feedback on a video device. The word video in video game traditionally referred to a raster display device. However, with the popular use of the term "video game", it now implies any type of display device. The electronic systems used to, electronics Consumer electronics include electronic equipment intended for everyday use. Consumer electronics are most often used in entertainment, communications and office productivity. Some products classed as consumer electronics include personal computers, telephones, MP3 players, audio equipment, televisions, calculators, GPS automotive navigation, apparel, furniture, food, and toys. Amazon has established separate websites in Canada, the United Kingdom, Germany, France, Japan, and China. It also provides international shipping to certain countries for some of its products. A 2009 survey found that Amazon was the UK's favorite music and video retailer, and third overall retailer.^[4]

History

Amazon was founded in 1994,^[5] spurred by what Bezos called "regret minimization framework", his effort to fend off regret for not staking a claim in the Internet gold rush.^[6] Company lore says Bezos wrote the business plan while he and his wife drove from New York to Seattle^[7], although that account appears to be apocryphal The term apocrypha is used with various meanings, including "hidden", "esoteric", "spurious", "of questionable authenticity", and "Christian texts that are not canonical".^[8]

The company began as an online bookstore Bookselling is the commercial trading of books, the retail and distribution end of the publishing process. People who engage in bookselling are called booksellers or bookmen;^[8] while the largest brick-and-mortar Brick and mortar refers to a company that possesses a building or store for operations. The name is a metonym derived from the traditional building materials associated with physical buildings – bricks and mortar – in contrast with online stores, which have no physical presence bookstores and mail-order catalogs Mail order is a term which describes the buying of goods or services by mail delivery. The buyer places an order for the desired products with the merchant through some remote method such as through a telephone call or web site. Then, the products are delivered to the customer. The products are typically delivered directly to an address supplied for books might offer 200,000 titles, an online bookstore could offer more. Bezos named the company "Amazon" after the world's largest river The Amazon River (Portuguese: Rio Amazonas; Spanish: Río Amazonas; pronounced /ˈæməzɒn/ ; /ˈæməzən/ (UK)) of South America is the largest river in the world with a total river flow greater than the next ten largest rivers combined. The Amazon, which has the largest drainage basin in the world, accounts for approximately one-fifth of the. 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 Washington (pronounced /ˈwɒʃɪŋtən/ ) is a state in the Pacific Northwest region of the United States. Washington was carved out of the western part of Washington Territory which had been ceded by Britain in 1846 by the Oregon Treaty as settlement of the Oregon Boundary Dispute. It was admitted to the Union as the forty-second state in 1889. In July 1995, the company began service and sold its first book on amazon.com - Douglas Hofstadter Douglas Richard Hofstadter is an American academic whose research focuses on consciousness, analogy-making, literary translation, artistic creation, and discovery in mathematics and physics. He is best known for his book Gödel, Escher, Bach: an Eternal Golden Braid, first published in 1979, for which he was awarded the 1980 Pulitzer Prize for's Fluid Concepts and Creative Analogies: Computer Models of the Fundamental Mechanisms of Thought.^[10] In 1996, it was reincorporated in Delaware Delaware is located in the northeastern portion of the Delmarva Peninsula and is the second smallest state in area . Estimates in 2007 rank the population of Delaware as 45th in the nation, but 6th in population density, with more than 60% of the population in New Castle County. Delaware is divided into three counties. From north to south, these. Amazon issued its initial public offering An initial public offering referred to simply as an "offering" or "flotation," is when a company (called the issuer) issues common stock or shares to the public for the first time. They are often issued by smaller, younger companies seeking capital to expand, but can also be done by large privately-owned companies looking to of stock The stock or capital stock of a business entity represents the original capital paid into or invested in the business by its founders. It serves as a security for the creditors of a business since it cannot be withdrawn to the detriment of the creditors. Stock is distinct from the property and the assets of a business which may fluctuate in on May 15, 1997, trading under the NASDAQ The NASDAQ Stock Market, also known as the NASDAQ, is an American stock exchange. "NASDAQ" originally stood for "National Association of Securities Dealers Automated Quotations," but the exchange's official stance is that the acronym is obsolete. It is the largest electronic screen-based equity securities trading market in the stock exchange symbol AMZN, at an IPO price of US$ The United States dollar is the official currency of the United States. The U.S. dollar is normally abbreviated as the dollar sign, $, or as USD or US$ to distinguish it from other dollar-denominated currencies and from others that use the $ symbol. It is divided into 100 cents18.00 per share ($1.50 after three stock splits A stock split or stock divide increases or decreases the number of shares in a public company. The price is adjusted such that the before and after market capitalization of the company remains the same and dilution does not occur. Options and warrants are included in the late 1990s).

Amazon's initial business plan A business plan is a formal statement of a set of business goals, the reasons why they are believed attainable, and the plan for reaching those goals. It may also contain background information about the organization or team attempting to reach those goals 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 The "dot-com bubble" was a speculative bubble covering roughly 1995–2000 (with a climax on March 10, 2000 with the NASDAQ peaking at 5132.52) during which stock markets in industrialized nations saw their equity value rise rapidly from growth in the more recent Internet sector and related fields. While the latter part was a boom and 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, but the modest profit was important in demonstrating the business model could be profitable. In 1999, Time Time is an American news magazine. A European edition (Time Europe, formerly known as Time Atlantic) is published from London. Time Europe covers the Middle East, Africa and, since 2003, Latin America. An Asian edition (Time Asia) is based in Hong Kong. As of 2009, Time no longer publishes a Canadian advertiser edition. The South Pacific edition, magazine named Bezos Person of the Year The tradition of selecting a Man of the Year began in 1927, with Time editors contemplating newsworthy stories possible during a slow news week. The idea was also an attempt to remedy the editorial embarrassment earlier that year for not having aviator Charles Lindbergh on its cover following his historic trans-Atlantic flight. By the end of the, recognizing the company's success in popularizing online shopping Online shopping is the process whereby consumers directly buy goods, services etc. from a seller interactively in real-time without an intermediary service over the Internet. If an intermediary service is present the process is called electronic commerce. An online shop, eshop, e-store, internet shop, webshop, webstore, online store, or virtual.

Acquisitions

• 1998: Internet Movie Database The Internet Movie Database is an online database of information related to movies, actors, television shows, production crew personnel, video games, and most recently, fictional characters featured in visual entertainment media. IMDb launched on October 17, 1990, and in 1998 was acquired by Amazon.com (IMDb).^[11]; Cambridge, Massachusetts Cambridge is a city in Middlesex County, Massachusetts, United States, in the Greater Boston area. It was named in honor of the University of Cambridge in England, a nexus of the Puritan theology embraced by the town's founders. Notably, Cambridge is home to two internationally prominent universities, Harvard University and the Massachusetts-based PlanetAll PlanetAll was a social networking, calendaring, and address book site launched in November 1996. It was founded by a group of Harvard Business School and MIT graduates. Their company, Sage Enterprises, was based in Cambridge, Massachusetts and was the winner of the 1996 New Business of the Year Award from the Cambridge Chamber of Commerce, a reminder service; Sunnyvale-based Junglee.com, an XML XML is a set of rules for encoding documents in machine-readable form. It is defined in the XML 1.0 Specification produced by the W3C, and several other related specifications, all gratis open standards-based data mining Data mining is the process of extracting patterns from data. Data mining is becoming an increasingly important tool to transform the data into information. It is commonly used in a wide range of profiling practices, such as marketing, surveillance, fraud detection and scientific discovery startup^[12]
• 1999: Alexa Internet Alexa Internet, Inc. is a California based subsidiary company of Amazon.com that is known for its toolbar and website. Once installed, the toolbar collects data on browsing behavior which is transmitted to the website where it is stored and analyzed and is the basis for the company's web traffic reporting, Accept.com, and Exchange.com^[13]
• 2003: online music retailer CD Now.^{[citation needed]}
• 2004: Joyo.com, a Chinese e-commerce website.^[14]
• 2005: BookSurge,^[15] a print on demand Print on demand , sometimes called publish on demand, is a printing technology and business process in which new copies of a book (or other document) are not printed until an order has been received. "Print on Demand" developed only after digital printing began, because it was not economical to print single copies using traditional company, and Mobipocket.com, an eBook An e-book is an e-text that forms the digital media equivalent of a conventional printed book, sometimes restricted with a digital rights management system. An e-book, as defined by the Oxford Dictionary of English, is "an electronic version of a printed book which can be read on a personal computer or hand-held device designed specifically software company.^[16][17]; CreateSpace.com (formerly CustomFlix), a Scotts Valley, California-based distributor of on-demand DVDs.^[18] CreateSpace has since expanded to include on-demand books, CDs, and video.
• 2006: Shopbop, a Madison, Wisconsin Madison is the capital of the U.S. state of Wisconsin and the county seat of Dane County. It is also home to the University of Wisconsin–Madison-based retailer of designer clothing and accessories for women.^[19]
• 2007: dpreview.com Digital Photography Review is a website about digital cameras and digital photography. The website has comprehensive reviews of digital cameras, buying guides, user reviews, and very active forums for the individual cameras as well as general photography forums. The website also has a large database with information about the individual digital, a London-based digital photography review website; Brilliance Audio, the largest independent publisher of audiobooks Spoken audio was available in school and public libraries and to a lesser extent in music shops. It was not until the 1980s that there began a concerted effort to attract book retailers. As publishers entered the field of spoken-word publishing, the transition to book retailers carrying audiobooks became commonplace on bookshelves rather than in in the United States.^[20]
• 2008: Audible.com Audible.com is an Internet provider of spoken audio entertainment, information, and educational programming. Audible sells digital audiobooks, radio and TV programs, and audio versions of magazines and newspapers. On January 31, 2008 Amazon.com announced it would buy Audible for about $300M. The deal closed in March of 2008 and Audible is now a; Fabric.com^[21]; Box Office Mojo Box Office Mojo is a website that tracks box office revenue in a systematic, algorithmic way. Brandon Gray started the site in August 1998 and claims to now receive over two million monthly visitors^[22]; AbeBooks AbeBooks is an online marketplace for books. Most books listed are used books, many are rare or out-of-print, and a growing number are new books. The company is based in Victoria, British Columbia, Canada, with offices in Düsseldorf, Germany, and the US. It was incorporated in 1995 and launched its websites in 1996. At present, they list more^[23]; Shelfari Shelfari is a social cataloging website. Shelfari users build virtual bookshelves of the titles they own or have read, and can rate, review, tag, and discuss their books. Shelfari was launched on October 11, 2006. In February 2007, Amazon.com invested $1 million in Shelfari, and moved to acquire it a year later in August of 2008.^[24] (including a 40% stake in LibraryThing LibraryThing is a social cataloging web application for storing and sharing personal library catalogs and book lists and whole ownership of Bookfinder.com, Gojaba.com, and FillZ); Reflexive Entertainment,^[25] a casual video game development company.
• 2009: Zappos Zappos.com is an online shoe and clothing shop. electronic commerce company specializing in footwear. Currently based in Henderson, Nevada, USA., the company warehouse is located in Shepherdsville, Kentucky, along with an outlet store. In addition, Zappos has two outlets stores in Las Vegas, Nevada and Henderson,^[26] an online shoe and apparel retailer^[27]
• 2010: Touchco.^[28], Woot^[29]

Spinoffs

• 2004: A9.com, a company focused on researching and building innovative technology.^{[citation needed]}
• 2007: Endless.com, an e-commerce brand focusing on shoes.^[30]

Merchant partnerships

The Web site CDNOW 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.^[31] Amazon also hosted and ran the website for Borders bookstores, but this ceased in 2008.^[32]

amazon.com powers and operates retail web sites for Target, 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, and Mothercare, Amazon provides a unified multichannel platform where a customer can seamlessly interact with the retail website, standalone in-store terminals, or phone-based customer service agents. Amazon Web Services also powers AOL's Shop@AOL.

Business results

The company remains profitable: net income was $35 million in 2003, $588 million in 2004, $359 million in 2005, and $190 million (including a $662 million charge for R&D) in 2006. Retained earnings were negative $1.8 billion in 2006, negative $1.4 billion in 2007, negative $730 million in 2008, and $172 million in 2009.^[33] Annual revenues, aided by product line expansion and rapid growth in international sales, grew from $3.9 billion in 2002 to $10.7 billion by 2006.

On November 21, 2005, Amazon entered the S&P 500 index, and, on December 31, 2008, the S&P 100 index. On March 26, 2010, Amazon had a higher market cap than Target Corporation, Home Depot, Costco, Barnes and Noble, and Best Buy, only lagging that of Walmart among American brick and mortar retailers. [1]

Locations

amazon.com has offices, fulfillment centers, customer service centers and software development centers across North America, Latin America, Europe and Asia.^[34]

Headquarters

The company's global headquarters are located on Seattle'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.^[35]

Software development centers

The company employs software developers in centers across the globe. While much of Amazon's software development is in Seattle, other locations include Slough and Edinburgh (United Kingdom), Dublin (Ireland), Bangalore, Chennai, and Hyderabad (India), Cape Town (South Africa), Iaşi (Romania), Shibuya, Tokyo (Japan), Beijing (China), and Tempe, Arizona (United States).

Fulfillment and warehousing

Fulfillment centers are located in the following cities, often near airports. These centers also provide warehousing and order-fulfillment for third-party sellers:^[36]

• North America:

• USA: Phoenix and Goodyear, AZ; New Castle, DE; Whitestown and Plainfield, IN; Coffeyville, KS; Campbellsville, Hebron (near CVG), Lexington, and Louisville, KY; Fernley and North Las Vegas, NV; Nashua, NH; Carlisle, Hazleton, Allentown, and Lewisberry, PA; Dallas/Fort Worth, TX; Sterling, VA

These U.S. distribution centers have been closed: Red Rock, Nevada; Chambersburg, Pennsylvania; and Munster, Indiana.^[37]

• Canada: Ontario, Mississauga - Canada Post facility

• Europe:

• England: Marston Gate, near Brogborough, Bedfordshire
• Scotland: Gourock, Inverclyde; Glenrothes, Fife
• Wales: Crymlyn Burrows, Swansea^[38][39] near Jersey Marine^[40]
• France: Orléans, Loiret - Boigny (2000), Saran (2007)
• Germany: Bad Hersfeld, Hesse; Leipzig, Saxony

• Asia:

• Japan: Ichikawa and Yachiyo, Chiba; Sakai, Osaka; Kawagoe, Saitama
• China: Guangzhou, Suzhou, Beijing

Products and services

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 industry pioneer eBay's large market share. amazon.com Auctions was followed by the launch of a fixed-price marketplace business, zShops, in September 1999, and the now defunct Sotheby's/Amazon partnership called amazon.com in November. Auctions and zShops evolved into Amazon Marketplace, a 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.

In August 2005,^[41] 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.^[41] 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.".^[42] Coverage by the trademark grew to include items such as paints, carpets, wallpaper, hair accessories, clothing, footwear, headgear, cleaning products, and jewelry.^[42] On 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 in September 25, 2007, selling downloads exclusively in MP3 format without digital rights management.^[43] This was the first online offering of DRM-free music from all four major record companies.^{[44][45][46][47]}

In August 2007, Amazon announced AmazonFresh,^[48] 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.^[49] 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.^[50]

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.^[51] 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.^[52]

Amazon Prime offers two day shipping with no minimum purchase amount for a flat annual fee, as well as discounted priority shipping rates. Amazon launched the program in the continental United States in 2005, in Japan, the United Kingdom and Germany in 2007, and in France (as "Amazon Premium") in 2008. 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 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 gigabytes 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.

In 2007 Amazon launched Amapedia, a wiki for user-generated content to replace ProductWiki, the video on demand service Amazon Unbox, and Amazon MP3, which sells downloadable MP3's. ^[53] Amazon's terms of use agreements restrict use of the MP3's, but Amazon does not use DRM to enforce those terms.^[54] Amazon MP3 sells music from the Big 4 record labels EMI, Universal, Warner Bros. Records, and Sony BMG, as well as independents. Previous to the launch of this service, Amazon made an investment in Amie Street, a music store with a variable pricing model based on demand.^[55] 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.^{[citation needed]}

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. In 2008 Amazon stated that its Kindle-based library included 200,000 titles. In December 2007, Amazon introduced SimpleDB, a database system, allowing users of its other infrastructure to utilize a high reliability high performance database system. 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 January 2008 Amazon began rolling out their MP3 service to subsidiary websites worldwide.^[56] In December, 2008, Amazon MP3 was made available in the UK. In September, IMDB and amazon.com launched a Music metadata browsing site with wiki-like user contribution.^[57] 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.^[58] Amazon Web Services launched a public beta of Amazon Elastic Compute Cloud running Microsoft Windows Server and Microsoft SQL Server.^[59] Amazon Connect enables authors to post remarks on their book pages to customers. WebStore allows businesses to create custom e-commerce websites using Amazon technology. Sellers pay a commission of 7 percent, including credit-card processing fees and fraud protection, and a subscription fee of $59.95/month 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 sold 143 e-books 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.^[60]

Website

The domain amazon.com attracted at least 615 million visitors annually by 2008, twice the numbers of walmart.com.^[61] Amazon attracts approximately 65 million customers to its U.S. website per month.^[62]

Reviews

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. Amazon provides an optional 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.

amazon.com's customer reviews are monitored for indecency, but do permit negative comments. Robert Spector, 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). Allegations have been made that Amazon has selectively deleted negative reviews of Scientology related items despite compliance with comments guidelines.^[63][64].

Content search

"Search Inside the Book" is a feature which allows customers to search for keywords in the full text of many books in the catalog.^[65][66] The feature started with 120,000 titles (or 33 million pages of text) on October 23, 2003.^[67] 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. 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.

Third-party sellers

Amazon derives about 40 percent of its sales from affiliate marketing called Amazon Associates and third-party sellers who sell products on Amazon^{[citation needed]}. 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.^[68] 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 and 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, 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.^[69]

A January 2010 survey of third-party sellers by Auctionbytes.com ^[70] found that Amazon was 4th overall. ^[71]. amazon.com placed second in "Profitability". Its lowest rating, but still above average, was in "Ease of Use". Sellers felt Amazon had clearly-defined rules, provided a steady stream of traffic to their listings, and put less emphasis on a community component. amazon.com came in second in the Recommended Selling Venue category.

Controversies

Differential pricing

In September 2000, price discrimination was found on amazon.com. Amazon offered to sell a buyer a DVD for one price, but after the buyer deleted cookies that identified him as a regular Amazon customer, he was offered the same DVD for a substantially lower price.^[72] Jeffrey P. Bezos subsequently apologized for the differential pricing and vowed that Amazon "never will test prices based on customer demographics". The company said the difference was the result of a random price test and offered to refund customers who paid the higher prices.^[73] Amazon had also experimented with random price tests in 2000 as customers comparing prices on a "bargain-hunter" Web site discovered that Amazon was randomly offering the Diamond Rio MP3 player for substantially less than its regular price.^[74]

Competition

The company has been controversial for its alleged use of patents as a competitive hindrance. The "1-click patent"^[75] 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 of Amazon in December 1999.^[76] The boycott was discontinued in September 2002.^[77] 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,^[78] and O'Reilly published an open letter^[79] 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^[80] with this petition. Bezos responded with his own open letter.^[81] 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".^[82] On May 12, 2006, the USPTO ordered a re-examination^[83] 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.^{[citation needed]}

Amazon has a Canadian site in both English and French, but until a ruling in March 2010, was prevented from operating any headquarters, servers, fulfillment centers or call centers in Canada by that country's legal restrictions on foreign-owned booksellers.^[84] 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.^[85] 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,^[86] but the litigation was dropped in 2004.^[87]

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 were required 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.^[88]

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.^[89][90] Also in 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 was possibly intended to put pressure on Hachette to provide levels of discount described by the trade as unreasonable. Curtis Brown's managing director Jonathan Lloyd opined that "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."^[91][92]

Kindle content removal

In July 2009, The New York Times reported that amazon.com deleted all customer copies of certain books published by MobileReference,^[93] including the books 1984 and Animal Farm from users' Kindles. This action was taken with neither prior notification nor specific permission of individual users. Customers did receive a refund of the purchase price and, later, an offer of an Amazon gift certificate or a check for $30.^[94]

Product availability

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 and filed a lawsuit against Amazon.^[95] A campaign to boycott Amazon was August 2007 gained attention after a dog fighting case involving NFL quarterback Michael Vick.^[96] In May 2008, Marburger Publishing agreed to settle with the Humane Society by requesting that Amazon stop selling their magazine, The Game Cock. The second magazine named in the lawsuit, The Feathered Warrior, remained available. ^[97]

In April 2009 it was publicized that some erotic, lesbian, gay, bisexual, transgender, feminist and politically liberal books were being excluded from Amazon's sales rankings.^[98] Various books and media were flagged as "Adult content," including children's books, self-help books, non-fiction, and non-explicit fiction. As a result, works by established authors E. M. Forster, Gore Vidal, Jeanette Winterson and D. H. Lawrence were unranked.^[99] The change first received publicity on the blog of author Mark R. Probst, who reproduced an e-mail from Amazon describing a policy of de-ranking "adult" material.^[98][99] However, Amazon later said that there was no policy of de-ranking LGBT material and blamed the change first on a "glitch"^[100] and then on "an embarrassing and ham-fisted cataloging error" that had affected 57,310 books.^[101]

In September 2009 it emerged that Amazon was selling MP3 music downloads falsely suggesting a well-known Premier League football manager was a child sex offender. Despite a campaign urging the retailer to withdraw the item, they refused to do so, citing freedom of speech.^[102] The company was then forced to withdraw the item when legal action was threatened.^[103] However, they continued to sell the item on their American, German and French websites.

Sale of Wikipedia's material as books

A German information portal for consumers (Preisgenau.de) has criticized Amazon for selling tens of thousands of print on demand books which reproduced Wikipedia articles. These books are produced by three Mauritian subsidiaries of the German publisher VDM: Alphascript Publishing, Betascript Publishing and Fastbook Publishing. Amazon did not acknowledge this issue raised on a blog and some customers that have asked the company to withdraw all these titles from its catalog.^[104] The collaboration between amazon.com and VDM Publishing was started in 2007.^[105]

Collection of sales tax

Amazon has been criticized for its refusal to collect sales taxes from customers in states in which it does not have a physical presence, thus giving it a comparative advantage over brick-and-mortar retailers. Possibly, such customers should pay the equivalent amount in use tax directly to their state; however, few customers do so. In 2008 New York passed a law that would force online retailers to collect sales taxes on shipments to New York State residents.^[106] Shortly after the law was signed, amazon.com filed a complaint in the New York Supreme Court objecting to the law.^[106] The complaint wasn't based on whether in-state customers should pay tax, but upon the long-standing practice of it being the responsibility of the customer to report the sales tax (known as use tax in this case) and not that of the out-of-state businesses.^[106] The lawsuit was tossed out of court in January, 2009, when New York State Supreme Court Justice Eileen Bransten stated "there is no basis upon which Amazon can prevail."^[107]

Amazon has created subsidiaries that are treated separately for tax matters, a legal technique called "entity isolation". The subsidiary that developed the Kindle is in California, but because it doesn't sell the Kindle directly to customers, Amazon's legal position is that it isn't required to collect sales taxes in California. In the company's financial report for the quarter ending September 30, 2009, the company stated that the imposition of sales-tax collection by more states or Congress could "decrease our future sales."^[108]

Other

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.^[109] A 2004 glitch in Amazon.ca's review system temporarily revealed that some well-established authors were anonymously giving themselves glowing reviews and "rival" authors terrible reviews.^[110] According to Amazon, those reviews have since been removed or made non-anonymous.

In April 2009, BusinessWeek magazine reported that Amazon.com was one of 25 US companies that paid the least US taxes. Amazon.com paid a 4.1 percent annual tax rate, far less than the standard 35 percent corporate rate, based on an analysis of the company's financial figures for 2005-2008. According to SEC filings, this rate was caused in part by lower tax rates for Amazon.com's international subsidiaries.^[111]

Amazon has opposed efforts by trade 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 a unionization 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 denied any link between the unionization effort and layoffs.^[112] Also in 2001, Amazon.co.uk hired a US management consultancy organization, The Burke Group, to assist in defeating a 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 victimized or sacked four union members during the 2001 recognition drive and held a series of captive meetings with employees.^[113]

Following the announcement of the Apple iPad on January 27, 2010, Macmillan Publishers entered into a pricing dispute with Amazon.com regarding electronic publications. Macmillan asked Amazon to accept a new pricing scheme it had worked out with Apple, raising the price of e-books from $9.99 to $15.^[114] Amazon responded by pulling all Macmillan books, both electronic and physical, from their website (although affiliates selling the books were still listed). On January 31, 2010, Amazon "capitulated" to Macmillan's pricing request.^[115] Also in 2010, Amazon issued a partial refund for a PlayStation 3 in the UK following feature removals.^[116]

Entrepreneurship by former employees

A number of companies have been started and founded by former Amazon.com employees.^[117]

• BankBazaar.com was founded by Arjun Shetty, a former senior product manager at amazon.com
• Evri was led by Neil Roseman, a former VP at amazon.com
• Foodista was founded by Barnaby Dorfman
• Hulu is led by Jason Kilar, a former SVP at amazon.com
• Jambool/SocialGold was co-founded by former amazon.com engineers Vikas Gupta and Reza Hussein
• Quora was co-founded by ex-amazon.com (and Facebook) engineer Charlie Cheever
• TeachStreet was founded by Dave Schappell, an early amazon.com product manager
• Trusera was founded by Keith Schorsch, an early Amazonian
• Pelago was co-founded by Jeff Holden, a former SVP at amazon.com and Darren Vengroff, a former Principal Engineer
• Wikinvest was founded by Michael Sha
• Benguela was founded by Chris Pinkham and Willem Von Biljon (they previously built amazon.com EC2)

See also

• Amazon Breakthrough Novel Award
• Amazon Standard Identification Number (ASIN)
• Online shopping
• Statistically Improbable Phrases: amazon.com's phrase extraction technique for indexing books.

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Further reading

• Robert Spector (2000). amazon.com - Get Big Fast : Inside the Revolutionary Business Model That Changed the World. Harper Collins Publishers. ISBN 0-06-662041-4.
• Mike Daisey (2002). 21 Dog Years. Free Press. ISBN 0-7432-2580-5.
• Mara Friedman (2004). amazon.com for Dummies. Wiley Publishing. ISBN 0-7645-5840-4.
• James Marcus (2004). Amazonia: Five Years at the Epicenter of the Dot.Com Juggernaut. W.W. Norton. ISBN 1-56584-870-5.
• "A conversation with Werner Vogels", ACM Queue, May 2006

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