biography of a giant - amazon.com

Biography of a Giant

A presentation in Marketing Strategy

A Z on a .com

Founded in 1994 by Jeff Bezos

Launched in 1995

Online bookstore and more...

First major companies to do e-commerce

Amazon.com company time linehttp://www.xtimeline.com/timeline/History-of-amazon-com

Did you know that...

The original name of Amazon.com was Cadabra.com

Startup phase

At 30, already VP of

Quit his job, to start an Internet company

Aggressive growth prospects ( 2300% )

Tom Alburg invested $100,000 (seed capital)

And sell what?

Bezos drew up a list of 20 products that could be sold on the Internet

Narrowed to 5Books

Hardware

Software

Videos

Compact Disc

Finally selected Books with 2000 titles in stock

Seattle HQ

An Online company with its core competency being Offline

Seattle because...Large high-tech work force

Proximity to a large book distribution center

Company Expansion

1997, IPO announced Fund used to: Broaden the company

Improve the product

Distribution capabilities

70% expansion in the Seattle HQ

New office in east coast

reduce delivery with east coast office publisher and customers


Douglas Hofstadter's book holds the privilege of being the first sold book on Amazon.com

Reseller Model

The Associate Program was also launched in 1997Webmasters could refer a book sale to Amazon

Made 3-8% on book sale

Amazon partnered with two US biggies

Later partnerships including

Product Expansion

The Amazon Advantage programSell your consignment @ 55% discount

Yearly membership fee of $29.95

Amazon stocks, manages, delivers and at the end pays you for every book


A glitch in Amazon.com's programming allowed writers to criticize their own works favorably on the site.

Product Expansion(cont.)

Amazon kidsCatering to site demographics

100K titles for teens and kids

Amazon music1998 also launched the music section with 125K titles

Searchable by artist, song title, label

Hear before buying (225K sound clips)

Online bubble burst

Jan 2000, company fired 150 workers

Reported a loss of $323 million for fourth quarter '99-2000

Summer of 2000, stock price dropped substantially

Early 2001, Amazon reported a whopping fiscal loss of $1.4 billion

Lehman Brothers warned investors that the company might run out of cash and advised them to avoid its stock

- Dec 1999, Time magazine named Bezos "Person of the Year," calling him the "king of cybercommerce."- Jan 2000, company fired 150 workers, mostly employees at its Seattle HQ- Amazon reported a loss of $323 million for the holiday fourth quarter 99-2000- summer of 2000, Amazon's stock price had dropped by more than two-thirds- "One much publicized report by Lehman Brothers warned investors that the company might run out of cash and advised them to avoid its stock"- Early 2001 -- when Amazon reported a whopping fiscal loss of $1.4 billion

The Change

Cut expenses and restructure business model

Laying off 1,300 workers(about 15% work force)

Closing two warehouses

Shutting down a Seattle customer-service center

Bezos followed with a memo calling for the company to get the crap out and stop selling products that weren't profitable.

The Change (cont.)

From specialty retailer into an online shopping portal

Adopted eBay's auction model

Selling merchandise from other retailers (apparel, etc)

Does not actually take control of the inventory

"The more things they can sell to (customers) and not do the dirty work, the better the business grows," said Kate Delhagen, a retail analyst with Forrester Research.

Amazon transformed itself from a specialty retailer into an online shopping portal, taking a cue from auctioneer eBay, which set itself up as a mediator between buyer and seller. It started selling products from companies such as Toys "R" Us and Target on its Web site. It added merchandise from smaller retailers in its zShops. And it competed directly with eBay through its Amazon Auctions.

Most recently, Amazon launched product categories with merchandise from other retailers. Its apparel store, for instance, debuted in the fall of 2002 stocked with underwear, sweaters and jeans from companies such as Nordstrom and Gap.

Although Amazon lists the merchandise on its Web site, it does not actually take control of the inventory; the individual vendors are responsible for fulfilling their orders. Amazon, however, receives a cut from the sales. Amazon's sales from third-party vendors are still a small percentage of its total revenue, but the margins are higher.

Website over the years

Branding - reBranding

http://www.kokogiak.com/gedankengang/2004/07/amazoncom-logo-timeline.html

Acquisitions

All our acquisition are specifically to gain technological edge or market-share

Year: 1998

The biggest repository for information about movies and television

Strengthening their plans to launch movies on Amazon portal

Acquisitions


Year: 1999

Every Amazon member gets a free first aid kit

Acquired 46% of Drugstore.com for $44 Million

Entry to the Pharmacy market segment

Acquisitions


Year: 1999

Access to many technology patents

A ton of demographics information

Opportunity for behavioral targetting

Acquisitions


Year: 2000

A 30 Million investment in WineShopper

Access to 550 wineries in 45 States

Reaching 85% of USA population

Acquisitions


Year: 2004

A web retailer in China, now Amazon china

Purchased for $75 Million

Caters mainly to books, music, video

Acquisitions


Year: 2006

Makers of open-source s/w used in wikipedia.org

Invested in Wikia inc. series B financing

Focus on User content driven development

Acquisitions


Year: 2008

Bought the online fabric store (amount undisclosed)

Custom measures and cut fabric

More to the Amazon catelog

Acquisitions


Year: 2009

An Online cooking encyclopedia

Untapped channel to up-sell F&B

Strengthen Amazon in another segment

Acquisitions


Year: 2009

Image recognition technology

Most popular applications for iPhones and Android phones

Gives image searching to Amazon mobile users

Acquisitions


Year: 2009

Acquisition worth $1.2 Billion

Biggest shoe retailer online

Core competency Logistics & Supply Chain

Whats the strategy now?

Plateauing growth!!

Line Extension

The KindlePaper like display quality

Books, Newspapers, Magazine

Adjustable font

Huge battery life

Amazon Kindle is a portable e-book reader. More precisely, it is a software, hardware and network platform developed by Amazon.com that utilizes wireless connectivity to enable users to shop for, download, browse, and read e-books, newspapers, magazines, blogs, and other digital media in some countries.

About the different version of kindleshttp://gdgt.com/amazon/kindle/

Amazon.com got outside the web browser in 2007 and offered its customers a way to purchase books through its very own making: an e-book reader specially designed by the online retailer. Since available in 2007, a new version has been announced and Amazon continues to expand the services and products available to current and future Kindle owners.

Selling more e-books

In 2010, for every 100 hardcover books Amazon sold 143 Kindle books

The U.S. Kindle store now has more than 630,000 books available

About 510,000 books available for Kindle are priced at $9.99 or less

Over 1.8 million free, out-of-copyright, pre-1923 books are also available to read on Kindle

* Over the past three months, for every 100 hardcover books Amazon has sold, it has sold 143 Kindle books. In its Kindle update, Amazon did not offer any comparison between the sales of paperbacks and e-books. * Over the last 30 days, for every 100 hardcover books Amazon.com has sold, it has sold 180 Kindle books. * Author James Patterson had sold 1.14 million e-books to date. Of those, 867,881 were Kindle books. * Five authorsCharlaine Harris, Stieg Larsson, Stephenie Meyer, James Patterson, and Nora Robertshave each sold more than 500,000 Kindle books. * The U.S. Kindle store now has more than 630,000 books available, including new releases and 106 of 110 New York Times best sellers. * About 510,000 books available for Kindle are priced at $9.99 or less, including 75 New York Times best sellers. * Over 1.8 million free, out-of-copyright, pre-1923 books are also available to read on Kindle.

Shift of focus

AWS (Amazon Web Services)

Mechanical Turks (Human Intelligence)

Diversification

From e-retailing to web servicesE-retailing is Retailing

Gap in the Current model

AWS offering

Compute power, storage, and other services

Platform or programming model flexibility

Ton of benefitsPay as you go model

Scalable

Comprehensive eco-system

Reliable the Dig effect

The Amazon Web Services (AWS) are a collection of remote computing services (also called web services) that together make up a cloud computing platform, offered over the Internet by Amazon.com. The most central and well-known of these services are Amazon EC2 and Amazon S3.

Amazon Web Services provide online services for other web sites or client-side applications. Most of these services are not exposed directly to end users, but instead offer functionality that other developers can use. In June 2007, Amazon claimed that more than 330,000 developers had signed up to use

AWS usage growth

Exponential growth

From jeffs bloghttp://aws.typepad.com/aws/2008/05/lots-of-bits.html

Who else use AWS

Every major educational institute

Diversification (cont.)

Amazon, from web services to human intelligence

Issues doing it recruiting in-houseTime consuming

Expensive

Difficult to scale

Mechanical Turks

Amazon take 10% project fee

Pay only for what you use

A global, on-demand, 24 x 7 workforce

Revenues 2002-09Amazon.comSouce Company FinancialsColumn 3

20023933

20035264

20046921

20058490

200610711

200714835

200819166

200924509

Male95

Female5

Age group of usersColumn 3

Under 206

21 - 3056

31 - 4028

41 - 508

50 plus2

Column 3

19970

19992

20000

20021

20033

20043.5

20053.5

biography of a giant - amazon.com

Technology