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Almost certainly the most visible brand
born on the web and one of the most talked-about companies in the brief
history of the internet. Amazon was founded by Jeff Bezos in 1994
with the aim of being able to deliver any book in print in the United
States, over 1m titles at time. By June 1999 it had become the first
internet company to reach 10m customers (and in fact gained over 10m new
customers in 1999 alone, finishing the year with a total of over 16m).At the
same time, Forbes magazine rated Bezos's personal worth at
more than $10 billion and the company, which had never got close to making a
profit, was worth twice as much as British Airways.
Bezos's most
important contribution to the internet economy has been people; more
precisely, shoppers prepared to hand over details of their credit cards to a
website. No other organisation has done as much to acclimatise people
to the idea that buying things on the internet is safe or made shopping
online quite as easy and enjoyable, another important reason for its
popularity with its customers. Amazon now sells not just books but also
dvds, cds, toys, games, electronic goods, health and beauty products and
even diy equipment, all of which make sizeable contributions to its
overall revenue. As if all this was not enough, the company has added an
auction service and a scheme for third parties to sell their goods on the
Amazon site, called Zshops, and has taken over several high-profile special
interest sites, including the highly rated Internet Movie Database. Perhaps
more importantly, it has also started to sell its own highly praised
software to other web retailers, earning $225m in 2001 from its Business-
to-Bisiness ventures and licensing deals alone.
Like most internet companies, Amazon spent most of its early years losing
money. But the size of its customer base and the health of its revenue
stream inspired confidence in the financial community, and in the last
quarter of 2001 the company posted its first ever operating profit, albeit a
small one. More encouraging results in 2002 have helped renew faith in
Amazon's prospects, with growth of 76% in its international markets in the
last quarter of 2002. It now has well over 30m customers and annual revenues
were nearly $4 billion in 2002. In common with other dotcom businesses,
Amazon's stock market value dropped by over 80% in one year, with the share
price plunging to less than $6 in September 2001 from a high of $221 in
1999. But its stock price remained relatively stable in 2002 and the future
looks promising. |
