History of Amazon

The company was founded as a result of what Jeff Bezos called his "regret minimization framework", which described his efforts to fend off any regrets for not participating sooner in the Internet business boom during that time.[1] In 1994, Bezos left his employment as vice-president of D. E. Shaw & Co., a Wall Street firm, and moved to Seattle, Washington, where he began to work on a business plan[2] for what would become Amazon.com.

On July 5, 1994, Bezos initially incorporated the company in Washington State with the name Cadabra, Inc.[3] After a few months he changed the name to Amazon.com, Inc because a lawyer misheard its original name as "cadaver".[4] In its early days, the company was operated out of the garage of Bezos's house on Northeast 28th Street in Bellevue, Washington.[5] In September 1994, Bezos purchased the domain name relentless.com and briefly considered naming his online store Relentless, but friends told him the name sounded a bit sinister. The domain is still owned by Bezos and still redirects to the retailer.[6]

Bezos selected the name Amazon by looking through a dictionary; he settled on "Amazon" because it was a place that was "exotic and different", just as he had envisioned for his Internet enterprise. The Amazon River, he noted, was the biggest river in the world, and he planned to make his store the biggest bookstore in the world.[7] Additionally, a name that began with "A" was preferred because it would probably be at the top of an alphabetized list.[7] Bezos placed a premium on his head start in building a brand and told a reporter, "There's nothing about our model that can't be copied over time. But you know, McDonald's got copied. And it's still built a huge, multibillion-dollar company. A lot of it comes down to the brand name. Brand names are more important online than they are in the physical world."[8]

After reading a report about the future of the Internet that projected annual web commerce growth at 2,300%, Bezos created a list of 20 products that could be marketed online. He narrowed the list to what he felt were the five most promising products, which included: compact discs, computer hardware, computer software, videos, and books. Bezos finally decided that his new business would sell books online, because of the large worldwide demand for literature, the low unit price for books, and the huge number of titles available in print.[9] Amazon was founded in the garage of Bezos' rented home in Bellevue, Washington.[7][10][11] Bezos' parents invested almost $250,000 in the start-up.[12]

In July 1995, the company began service as an online bookstore.[13] The first book sold on Amazon.com was Douglas Hofstadter's Fluid Concepts and Creative Analogies: Computer Models of the Fundamental Mechanisms of Thought.[14] In the first two months of business, Amazon sold to all 50 states and over 45 countries. Within two months, Amazon's sales were up to $20,000/week.[15] In October 1995, the company announced itself to the public.[16] In 1996, it was reincorporated in Delaware. Amazon issued its initial public offering of stock on May 15, 1997, at $18 per share, trading under the NASDAQ stock exchange symbol AMZN.[17]

Barnes & Noble sued Amazon on May 12, 1997, alleging that Amazon's claim to be "the world's largest bookstore" was false because it "...isn't a bookstore at all. It's a book broker." The suit was later settled out of court and Amazon continued to make the same claim.[18] Walmart sued Amazon on October 16, 1998, alleging that Amazon had stolen Walmart's trade secrets by hiring former Walmart executives. Although this suit was also settled out of court, it caused Amazon to implement internal restrictions and the reassignment of the former Walmart executives.[18]

In 1999, Amazon first attempted to enter the publishing business by buying a defunct imprint, "Weathervane", and publishing some books "selected with no apparent thought", according to The New Yorker. The imprint quickly vanished again, and as of 2014 Amazon representatives said that they had never heard of it.[19] Also in 1999, Time magazine named Bezos the Person of the Year when it recognized the company's success in popularizing online shopping.[20]

Amazon Toys Team employees circa 2000 during a summer Amazon party. Jeff Bezos is wearing the black shirt.

Since June 19, 2000, Amazon's logotype has featured a curved arrow leading from A to Z, representing that the company carries every product from A to Z, with the arrow-shaped like a smile.[21]

According to sources, Amazon did not expect to make a profit for four to five years. This comparatively slow growth caused stockholders to complain that the company was not reaching profitability fast enough to justify their investment or even survive in the long-term. In 2001, the dot-com bubble burst destroyed many e-companies in the process, but Amazon survived and moved forward beyond the tech crash to become a huge player in online sales. The company finally turned its first profit in the fourth quarter of 2001: $0.01 (i.e., 1¢ per share), on revenues of more than $1 billion. This profit margin, though extremely modest, proved to skeptics that Bezos' unconventional business model could succeed.[22][23]

In 2011, Amazon had 30,000 full-time employees in the US, and by the end of 2016, it had 180,000 employees.

In 2014, Amazon launched the Fire Phone. The Fire Phone was meant to deliver media streaming options but the venture failed, resulting in Amazon registering a $170 million loss. This would also lead to the Fire Phone production being stopped the following year. In August of the same year, Amazon would finalize the acquisition of Twitch, a social video gaming streaming site for $970 million. This new acquisition would be integrated into the game production division of Amazon.

Day 1 building in Seattle

In June 2017, Amazon announced that it would acquire Whole Foods, a high-end supermarket chain with over 400 stores, for $13.4 billion.[24][25] The acquisition was seen by media experts as a move to strengthen its physical holdings and challenge Walmart's supremacy as a brick and mortar retailer. This sentiment was heightened by the fact that the announcement coincided with Walmart's purchase of men's apparel company Bonobos.[26] On August 23, 2017, Whole Foods shareholders, as well as the Federal Trade Commission, approved the deal.[27][28]

In September 2017, Amazon announced plans to locate a second headquarters in a metropolitan area with at least a million people.[29] Cities needed to submit their presentations by October 19, 2017 for the project called HQ2.[30] The $5 billion second headquarters, starting with 500,000 square feet and eventually expanding to as much as 8 million square feet, may have as many as 50,000 employees.[31] In 2017, Amazon announced it would build a new downtown Seattle building with space for Mary's Place, a local charity in 2020.[32]

As 2017 came to a close, Amazon had over 566,000 employees worldwide.[33][34]

According to an August 8, 2018 story in Bloomberg Businessweek, Amazon has about a 5 percent share of US retail spending (excluding cars and car parts and visits to restaurants and bars), and a 43.5 share of American online spending in 2018. The forecast is for Amazon to own 49 percent of the total American online spending in 2018, with two-thirds of Amazon's revenue coming from the US.[35]

Amazon launched the last-mile delivery program and ordered 20,000 Mercedes-Benz Sprinter Vans for the service in September 2018.[36][37]

To make data transfers from space cheaper and easier Amazon added 12 antennas for the satellite data in November 2018.[38]

Amazon will generate $258.22 billion in US retail ecommerce sales this year, up 29.2% over last year. Amazon's Marketplace sales will represent an increasingly dominant portion of its ecommerce business—68.0% this year, compared with 32.0% for Amazon direct sales. By the end of 2018, sales generated from Amazon's Marketplace will be more than double that of Amazon's direct sales in the US.[39]

On January 22, 2018, Amazon Go, a store that uses cameras and sensors to detect items that a shopper grabs off shelves and automatically charges a shopper's Amazon account, was opened to the general public in Seattle.[50][51] Customers scan their Amazon Go app as they enter, and are required to have an Amazon Go app installed on their smartphone and a linked Amazon account to be able to enter.[50] The technology is meant to eliminate the need for checkout lines.[52][53][54] Amazon Go was initially opened for Amazon employees in December 2016.[55][56][57] By the end of 2018, there will be 8 total Amazon Go stores located in Seattle, Chicago, San Francisco and New York.[58] Amazon has plans to open as many as 3,000 Amazon Go locations across the United States by 2021.[59].Just Walk Out Technology automatically detects when products are taken from or returned to the shelves and keeps track of them in a virtual cart. When you’re done shopping, you can just leave the store. Later, we’ll send you a receipt and charge your Amazon account.[60]

Amazon announced to debut the Amazon 4-star in New York, Soho neighborhood Spring Street between Crosby and Lafayette on 27 September 2018. The store carries the 4-star and above rated products from around New York.[61] The Amazon website searches for the most rated, highly demanded, frequently bought and most wished for products which are then sold in the new Amazon store under separate categories. Along with the paper price tags, the online-review cards will also be available for the customers to read before buying the product.[62][63]

Amazon has grown through a number of mergers and acquisitions.

The company has also invested in a number of growing firms, both in the United States and internationally.[64][65] In 2014, Amazon purchased top level domain .buy in auction for over $4 million.[66][67] The company has invested in brands that offer a wide range of services and products, including Engine Yard, a Ruby-on-Rails platform as a service company,[68] and Living Social, a local deal site.[69]