In 2015, Amazon surpassed Walmart as the most valuable retailer in the United States by market capitalization. Is the second most valuable public company in the world (behind only Apple), the largest Internet company by revenue in the world, and after Walmart, the second largest employer in the United States. In 2017, Acquired Whole Foods Market for $13.4 billion, which vastly increased presence as a brick-and-mortar retailer. The acquisition was interpreted by some as a direct attempt to challenge Walmart’s traditional retail stores. In 2018, for the first time, Jeff Bezos released in shareholder letter the number of Prime subscribers, which is 100 million worldwide On September 4, 2018, Reached US$1 trillion in value, becoming the second publicly traded US company to do so after Apple.
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. 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 for what would become Amazon.com.
On July 5, 1994, Bezos initially incorporated the company in Washington State with the name Cadabra, Inc. He later changed the name to company, a few months later, after a lawyer misheard its original name as “cadaver”. In September 1994, Bezos purchased the URL 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.
Bezos selected the name company by looking through the 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. Additionally, a name that began with “A” was preferential due to the probability it would occur at the top of an alphabetized list. 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.
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, due to the large worldwide demand for literature, the low price points for books, along with the huge number of titles available in print. Amazon was founded in the garage of Bezos’ rented home in Bellevue, Washington. Bezos’ parents invested almost $250,000 in the start-up.
In July 1995, the company began service as an online bookstore. The first book sold on website was Douglas Hofstadter’s Fluid Concepts and Creative Analogies: Computer Models of the Fundamental Mechanisms of Thought. In the first two months of business, Company sold to all 50 states and over 45 countries. Within two months, Company’s sales were up to $20,000/week. In October 1995, the company announced itself to the public. In 1996, it was reincorporated in Delaware. Company issued its initial public offering of stock on May 15, 1997, at $18 per share, trading under the NASDAQ stock exchange symbol AMZN.
Barnes & Noble sued on May 12, 1997, alleging that Company’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 continued to make the same claim. Walmart sued on October 16, 1998, alleging that company had stolen Walmart’s trade secrets by hiring former Walmart executives. Although this suit was also settled out of court, it caused company to implement internal restrictions and the reassignment of the former Walmart executives.
In 1999, Company 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 company representatives said that they had never heard of it. Also in 1999, Time magazine named Bezos the Person of the Year when it recognized the company’s success in popularizing online shopping.
Since June 19, 2000, Company’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.
According to sources, Company 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. The dot-com bubble burst at the start of the 21st century and destroyed many e-companies in the process, but Company 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: $5 million, on revenues of more than $1 billion. This profit margin, though extremely modest, proved to skeptics that Bezos’ unconventional business model could succeed.
In 2011, Company had 30,000 full-time employees in the USA, and by the end of 2016, it had 180,000 employees.
In June 2017, Company announced that it would acquire Whole Foods, a high-end supermarket chain with over 400 stores, for $13.4 billion. 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. On August 23, 2017, Whole Foods shareholders, as well as the Federal Trade Commission, approved the deal.
In September 2017, Company announced plans to locate a second headquarters in a metropolitan area with at least a million people. Cities needed to submit their presentations by October 19, 2017 for the project called HQ2. 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. In 2017, Amazon announced it would build a new downtown Seattle building with space for Mary’s Place, a local charity in 2020.
At the end of 2017, Amazon had over 566,000 employees worldwide.
According to an August 8, 2018 story in Bloomberg Businessweek, Company has about a 5 percent share of U.S. 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 company to own 49 percent of the total American online spending in 2018, with two-thirds of Amazon’s revenue coming from the U.S. Company launched the last-mile delivery program and ordered 20,000 Mercedes-Benz Sprinter Vans for the service in September 2018.