Term Papers On The Player

While the entire U.S. book industry sat back complacently and waited to see what the future of digital technology would bring to their businesses, in the summer of 1995 a young Wall Street executive set up an online bookselling business in the garage of his modest Seattle home.
Armed with his reputation and credibility from years on Wall Street, which he used to solicit investment capital, Jeffrey Bezos managed to start Amazon.com with little overhead, other than the price of a few computers. Bezos handled customer service himself, and fulfillment was done through wholesalers such as Ingram and Baker & Taylor.
By being the first major e-retailer on the Internet, Amazon has become the yardstick by which all e-commerce is measured. As an online bookseller, no other web site, except maybe barnesandnoble.com, can rival Amazon in terms of its marketing strategies, and its database technology, which has revolutionized the way we look for and purchase books.
Since its inception, Amazon.com has taken great pains in attempting to ‘virtually’ create the atmosphere of a bookstore on its web site. Amazon.com, which originally billed themselves as “Earth’s Biggest Bookstore,” and now prefers “Earth’s Biggest Selection,” believes that the sale of books, music and other products and services over the Web can offer attractive benefits to customers.

According to Forrester Research, the total value of goods and services purchased over the Web was $43 billion in 1998 and is expected to increase to $1.3 trillion in 2003. Cumulative customer accounts represent the number of individuals who have made a purchase from Amazon.com. In the quarter ending December 31, 1998, cumulative customer accounts increased by over 1.7 million to nearly 6.2 million, an increase of over 300 percent from 1.5 million customer accounts at December 31, 1997.
With all of Amazon’s impressive attributes and millions in revenues, the company has yet to turn a profit. That is perfectly fine with Bezos, who insists that Amazon is meeting its basic goal: “Get big fast.”10 In an interview with Publishers Weekly, Bezos said that the company’s growth was “beyond any realistic expectations,” and at this point he is more concerned with branding and marketing the bookselling site than with showing a profit.
Since Amazon.com went public in May 1997, it has garnered the admiration of Wall Street. Despite Amazon’s staggering losses, one need only witness Bezos’ air of confidence, and his pioneering marketing strategies to understand why.
Market-watchers say there are other reasons to believe Amazon.com has a good potential. First, the company has already built up a solid name recognition, notes Kathleen Smith, an analyst with Renaissance Capital in Greenwich, CT., which specializes in IPO research and investing. “We know a lot of people have been critical because they are not earning money and there is a lot of competition” says Smith. “But Amazon is a leader in online bookselling. It has made enough of a dent in the market to get the attention of the big players like Barnes & Noble, which is trying to crash the party.
Second, says Smith, “the company has turned in good revenue growth since it started in 1994. Amazon has succeeded in getting to $30 million in revenue in a couple of years, which is impressive,” Smith notes. She also likes the fact that venture capital firms that have a good track record for picking winners, like Kleiner Perkins, are behind Amazon.
In an attempt to achieve an even greater presence on the Internet, Bezos recently invested further in Amazon’s future by starting and/or acquiring the following:
* Added videos, CDs, gifts, toys, and electronics to selection.
* Acquired 3 internet companies: including Exchange.com which runs bibliofind, a database of more than nine million hard-to-find and rare books, and lists thousands of independent dealers and retailers; Alexa Internet, a San Francisco company that makes The price paid for all three was a total of $645 million in stock.
* Drugstore.com
* The Internet Movie Database – a highly trafficked web site of movie and entertainment information, with links to Amazon for every related book, movie, or CD.
* An auction web site to compete with ebay.com, an auction web site whose stock is also favored on Wall St
* Opened new warehouses (which increases overhead costs tremendously)
* Launching a greeting card web page
* A shopping service called “Shop the Web” which links Amazon shoppers to web sites of products they do not sell, such as clothing and furniture.
With international sales totaling $122 million in 1998, up from $37 million in 1997,14 Amazon.com has taken an aggressive stance by expanding globally with the launch of their British and German web sites, Amazon.uk, and Amazon.de, respectively. Though they share their customer database with parent company, Amazon.com, these Amazon branches are run out of their respective countries and sell mostly indigenously published titles.
As Bill Gates says in his book, Business @ The Speed of Thought, regarding e-commerce, “Businesses that are out there early are not just getting ahead on the learning curve. They are also rushing to redefine business boundaries. Amazon.com, which established itself as an Internet book vendor, has begun to sell CDs. There is no reason for Amazon not to sell other merchandise as well. The initial impetus for your company to go onto the Web might be to obtain cost savings and attract new customers. Once you have customers interacting with you, you have an incredible ability to build on that relationship to offer a broader set of products.”15 In doing exactly what Bill Gates describes, Amazon has become the benchmark for all new businesses, especially those on the Internet.

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