E-commerce success-story: Amazon
[Link]
Amazon is a global superstore, like Walmart. It’s also a hardware manufacturer, like Apple, a video
distributor, like Netflix, and a book publisher, like Random House, and a production studio, like Paramount,
and a literary magazine, like The Paris Review, and a grocery deliverer, like FreshDirect, and someday it
might be a package service, like U.P.S. Its founder and chief executive, Jeff Bezos, also owns a major
newspaper, the Washington Post. All this makes Amazon something radically new in the history of American
business.
Bezos originally thought of calling his company [Link] before adopting the name of the
world’s largest river. Amazon’s shape-shifting quality, its tentacles extending in all directions, makes it
unusual even in the tech industry, where rapid growth, not profitability, is the measure of success.
Amazon began as a bookstore. In 1994, at the age of thirty, Bezos, a Princeton graduate, quit his job
as a Wall Street banker, borrowed his parents’ retirement savings and moved to Seattle to set up a
company that could ride the exponential growth of the early commercial Internet, when Internet use was
growing by over 2000% per month. His wife, MacKenzie, is a novelist who studied under Toni Morrison at
Princeton; according to Stone, Bezos’s favorite novel is Kazuo Ishiguro’s “The Remains of the Day,” which is
on the suggested reading list for Amazon executives.
Nonetheless, it wasn’t a love of books that led him to start an online bookstore. Books are easy to
ship and hard to break, and there was a major distribution warehouse in Oregon.
Bezos said that Amazon intended to sell books as a way of gathering data on affluent, educated
shoppers. The books would be priced close to cost, in order to increase sales volume. After collecting data on
millions of customers, Amazon could figure out how to sell everything else dirt cheap on the Internet.
Before Google, and long before Facebook, Bezos had realized that the greatest value of an online
company lay in the consumer data it collected. Two decades later, Amazon diversified into a bewildering
array of products: lawnmowers, iPods, art work, toys, diapers, dildos, shoes, bike racks, 3-D printers.
Amazon’s code of corporate secrecy is extreme—it won’t confirm how many Seattle employees it has, or
how many Kindle e-readers have been sold—so it’s impossible to know for sure, but, according to one
publisher’s estimate, book sales in the U.S. now make up no more than seven per cent of the company’s
roughly seventy-five billion dollars in annual revenue.
Recently, Amazon even started creating its own “content”—publishing books.
Fill in the table with information from the text. There is an example.
0. Amazon’s activities as a company hardware manufacturer video distributor, book
publisher, production studio, literary magazine,
grocery deliverer,
1. Jeff Bezos’s current position in the firm
2. Jeff Bezos’s previous position before founding
Amazon
3. starting capital
4. the rate at which Internet use was increasing
when the company was founded
5. Mrs Bezos’ relationship with books
6. the reason why Bezos started business with
books
7. the location where the stocks were stored
initially
8. how collecting data on the buyers’ of books
helped Bezos
9. the most important value that an online
retailer can have
10. products that the company diversified into
(write 3 examples)
11. the relevance of the figure 7%
12. the business activity Amazon has started
recently
Decide if the statements are true (T) or false (F). There is one example.
0 The owner of The Washington Post is Jeff Bezos. T
1 It is not very typical of other companies to be so diverse in their activities as Amazon.
2 Amazon’s founder had some previous experience in business and finance when he
established his company.
3 Jeff Bezos doesn’t really love books.
4 The prices of books sold by Amazon tend to be relatively high because they target
rich customers.
5 Amazon’s estimated revenues from books are approximately 75 bn dollars.
