Amazon is an Americanmultinational technology company which focuses one-commerce,cloud computing, anddigital streaming. It has been referred to as "one of the most influential economic and cultural forces in the world",[1] and is one of theworld's most valuable brands.[2]
Amazon was founded byJeff Bezos from his garage inBellevue,Washington,[3] on July 5, 1994. Initially an online marketplace for books, it has expanded into a multitude of product categories: a strategy that has earned it the moniker "the everything store".[4] It has multiplesubsidiaries includingAmazon Web Services (cloud computing),Zoox (autonomous vehicles),Kuiper Systems (satellite Internet),Amazon Lab126 (computer hardwareR&D). Its other subsidiaries includeRing,Twitch,IMDb,MGM Holdings andWhole Foods Market.
The company was created as a result of whatJeff Bezos called his "regret minimization framework" – to avoid regretting, in his old age, not having tried to participate in the emerging internet with his own startup.[5] In 1994, Bezos left his job as a vice president atD. E. Shaw & Co., a Wall Street firm, and moved to Seattle, Washington, where he began to work on a business plan[6] for what would become Amazon.com.
On July 5, 1994, Bezos initially incorporated the company inWashington state with the name Cadabra, Inc.[7] After a few months, he changed the name to Amazon.com, Inc, because a lawyer misheard its original name as "cadaver".[8] Bezos selected this name 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. TheAmazon River, he noted, was the biggest river in the world, and he planned to make his store the biggest bookstore in the world.[9] Additionally, a name that began with "A" was preferred because it would probably be at the top of an alphabetized list.[9] 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."[10]
In its early days, the company was operated out of the garage of Bezos's house on Northeast 28th Street inBellevue, Washington.[11]Shel Kaphan was theprogrammer at the company's inception.[12]
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.[13] Amazon was founded in the garage of Bezos' rented home in Bellevue.[9][14][15] Bezos' parents invested almost $245,573 (equivalent to $506,800 in 2024) in the start-up.[16][17]
On July 16, 1995, Amazon opened as an online bookseller, selling the world's largest collection of books to anyone with World Wide Web access.[18] The first book sold on Amazon.com wasDouglas Hofstadter'sFluid Concepts and Creative Analogies: Computer Models of the Fundamental Mechanisms of Thought.[19] 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 per week.[20] In October 1995, the company announced itself to the public.[21] In 1996, it wasreincorporated in Delaware. Amazon issued itsinitial public offering ofcapital stock on May 15, 1997, at $18 per share, on theNASDAQ stock exchange under the symbol AMZN.[22]
Barnes & Noble sued Amazon on May 12, 1997, alleging that Amazon's claim to be "the world's largest bookstore" was false because it "...wasn'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.[23]
In June of 1998 the company began to offer music.[19]
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.[23]
In 1999, Amazon first attempted to enter thepublishing business by buying a defunctimprint, "Weathervane", and publishing some books "selected with no apparent thought", according toThe New Yorker. The imprint quickly vanished again, and as of 2014[update] Amazon representatives said that they had never heard of it.[24]
Between October 1999[25] and February 2000[26] 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.
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, thedot-com bubble burst, destroying 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. Thisprofit margin, though extremely modest, proved to skeptics that Bezos' unconventionalbusiness model could succeed.[27][28]
In 2011, Amazon had 30,000 full-time employees in the US, and by the end of 2016, it had 180,000 employees.[29]
In 2014, Amazon launched theFire 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 ofTwitch, a social video gaming streaming site, for $970 million. This new acquisition would be integrated into the game production division of Amazon.
In June 2017, Amazon announced that it would acquireWhole Foods, a high-endsupermarketchain with over 400 stores, for $13.4 billion.[30][31] The acquisition was seen by media experts as a move to strengthen its physical holdings and challengeWalmart'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 companyBonobos.[32] On August 23, 2017, Whole Foods shareholders, as well as theFederal Trade Commission, approved the deal.[33][34]
In September 2016, Amazon announced plans to locate a second headquarters in ametropolitan area with at least a million people.[35] Cities needed to submit their presentations by October 19, 2017, for the project called HQ2.[36] 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.[37] In 2017, Amazon announced it would build a new downtown Seattle building with space for Mary's Place, a local charity in 2020.[38]
At the end of 2017, Amazon had over 566,000 employees worldwide.[39][40]
According to an August 8, 2018, story inBloomberg Businessweek, Amazon has about a 5% share of US retail spending (excluding cars and car parts and visits to restaurants and bars), and a 43.5% share of online spending in the U.S. in 2018. The forecast is for Amazon to own 49% of the total American online spending in 2018, with two-thirds of Amazon's revenue coming from the US.[41]
Amazon launched the last-mile delivery program and ordered 20,000Mercedes-Benz Sprinter Vans for the service in September 2018.[42][43]
Amazon generated $386 billion in US retail e-commerce sales in 2020, up 38% over 2019. Amazon's Marketplace sales represent an increasingly dominant portion of its e-commerce business.
On November 14, 2022, it was announced that Amazon had plans to lay off 10,000 employees among its corporate and technology staff.[44] The number increased to 18,000 in a January 2023 announcement.[45] In March, Amazon announced it would eliminate an additional 9,000 jobs.[46]
On September 25, 2023, Amazon and artificial intelligence startupAnthropic announced a strategic partnership in which Amazon would become a minority stakeholder by investing up to US$4 billion, including an immediate investment of $1.25 billion. As part of the deal, Anthropic would useAmazon Web Services (AWS) as its primary cloud provider and will make its AI models available to AWS customers.[47][48]
With more than one million workers employed in warehouses around the world, Amazon in 2023 started testinghumanoid robots that provide partialautomation of its work tasks.[49] The robots are able to position empty boxes and indicate where new ones are stored.[50]
In November 2018, Amazon[51] announced it would open its highly sought-after new headquarters, known as (HQ2) inLong Island City,Queens, New York City,[52][53] and in theCrystal City neighborhood ofArlington County, Virginia.[54] On February 14, 2019, Amazon announced it was not moving forward with plans to build HQ2 in Queens[55] but would instead focus solely on the Arlington location. The company plans to locate at least 25,000 employees at HQ2 by 2030 and will invest more than US$2.5 billion[56] to establish its new headquarters in Crystal City as well as neighboring Pentagon City and Potomac Yard, an area jointly marketed as "National Landing." The announcement also created a new partnership withVirginia Tech University to develop an Innovation Campus to fill the demand for high-tech talent in National Landing and beyond.
At the end of March 2020, some workers of theStaten Island warehouse staged awalkout in protest of the poor health situation at their workplace amidst the2020 COVID-19 pandemic. One of the organizers,Chris Smalls, was first put onquarantine without anyone else being quarantined, and soon afterwards fired from the company.[57][58][59][60][61]
The pandemic caused a surge in online shopping and resulted in shortages of household staples both online and in some brick-and-mortar stores. From March 17[62] to April 10, 2020,[63] Amazon warehouses stopped accepting non-essential items from third-party sellers. The company hired approximately 175,000 additional warehouse workers and delivery contractors to deal with the surge, and temporarily raised wages by $2/hour.[63]
After months of speculation due toMGM's poor financial performance from the COVID-19 pandemic's impact on the movie industry, Amazon entered negotiations to acquire MGM at an estimated$9 billion on May 17, 2021.[64] The companies agreed to the merger deal on May 26, 2021, for a total value of$8.45 billion, subject to regulatory approval. The deal would allow Amazon to add the MGM library to theAmazon Prime Video catalog, with the studio continuing to operate as a label under the new parent company.[65]
The merger was finalized on March 17, 2022, following the expiration of the FTC's review deadline[66] and having cleared the European Commission two days earlier on March 15.[67][68][69][70][71][72][73] Later that day, Amazon Studios and Prime Video SVP Mike Hopkins revealed that Amazon will continue to partner withUnited Artists Releasing (MGM andAnnapurna Pictures' joint distribution venture), which will remain in operation to release all future MGM titles theatrically on a "case-by-case basis," while "all MGM employees will join my organization." It was also revealed that Amazon had no plans to make changes to the studio's production slate and release schedules nor make all MGM content exclusive to Prime Video, providing some hope that the studio would operate autonomously from Amazon Studios. These plans are expected to not impact the future of theJames Bond franchise and its creative team. Twotown halls further detailing MGM's future post-merger took place on March 18, 2022, which included one for MGM employees and one for Amazon Studios/Prime Video employees.[74] Both revealed the new interim reporting structure as part of Amazon's "phased integration plan," which would involve De Luca, Mark Burnett (Chairman ofMGM Worldwide Television) andCOO Chris Brearton reporting to Hopkins on behalf of the studio.[75] On April 27, 2022, it was announced that De Luca and Abdy would leave the studio.[76]
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.[77][78] 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.[77] The technology is meant to eliminate the need for checkout lines.[79][80][81]Amazon Go was initially opened for Amazon employees in December 2016.[82][83][84] By the end of 2018, Amazon was operating a total of 8 Amazon Go stores located in Seattle, Chicago, San Francisco and New York.[85] As of August 2024, Amazon Go had 23 locations in New York, California, Washington, and Illinois.
Amazon announced to debut the Amazon 4-star in the Soho neighborhood of New York City on Spring Street between Crosby and Lafayette on September 27, 2018. The store carries 4-star and above-rated products from around New York.[86] 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.[87][88] In late 2021, Amazon opened two 4-star stores in the United Kingdom. Its store at theBluewater Shopping Centre inKent opened in October, and its store atWestfield London opened in November.[89]
In March 2022, Amazon announced that they would be closing all 4-star stores, along with their Books and Pop Up stores, across the US and the UK, stating that they were refocusing on their grocery and fashion stores.[90]
Amazon has grown throughseveral mergers and acquisitions. The company has also invested in a number of growing firms, both in the United States and internationally.[91][92] In 2014, Amazon purchased top level domain .buy in auction for over $4 million.[93][94] 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,[95] and Living Social, a local deal site.[96]
| Time period | Key developments at Amazon |
|---|---|
| 1994–1998 | Amazon started off as an online bookstore selling books, primarily competing with local booksellers andBarnes & Noble. ItIPOs in 1997. |
| 1998–2004 | Amazon starts to expand its services beyond books. It also starts offering convenience services, such as Free Super Savers Shipping. |
| 2005–2011 | Amazon moves into thecloud computing area withAmazon AWS, as well as the crowdsourcing area withAmazon Mechanical Turk. By being an early player, it eventually dominates thecloud computing scene, allowing it to control much of the physical infrastructure of the Internet.[97] Amazon also offers theAmazon Kindle for people to purchase their books aseBooks, and by 2010, more people buy ebooks than physical books from Amazon. |
| 2011–2015 | Amazon starts offering streaming services like Amazon Music and Amazon Video. By 2015, its market capitalization surpassed that of Walmart. |
| Year | Month and date | Event type | Details |
|---|---|---|---|
| 1994 | July 4 | Company | Amazon founded.[98] |
| 1995 | July 16 | Launch | Amazon launches its online bookstore. |
| 1997 | May 15 | Company | Amazon IPOs at $18.00/share, raising $54 million.[98] |
| 1998 | April 27 | Acquisitions | Amazon acquires theInternet Movie Database, a comprehensive repository for movie information on the Internet.[99] |
| 1998 | August 24 | Company Direction | Amazon announces that it will move beyond books.[100] |
| 1998 | December | Competition | Jack Ma launchesAlibaba inChina, which would later grow to dominate the Chinese online retail market, and provide an obstacle to Amazon's attempts to expand in China.[101][102] |
| 2002 | January | Product | Amazon launches Free Super Saver Shipping, which allows customers to get free shipping for orders above $99.[98] |
| 2002 | March | Legal, Competition | Amazon settles its October 1999 patent infringement suit againstBarnes & Noble (over its1-Click checkout system, which it received a patent for in September 1999). It originally charged that Barnes&Noble.com had essentially copied Amazon's 1-Click technology.[103] |
| 2003 | October | Product | Amazon launchesA9.com, a subsidiary of Amazon.com based in Palo Alto, California that develops search and advertising technology.[104] |
| 2003 | December | Company | First profit announced.[105] |
| 2004 | August 19 | International | Amazon acquires Joyo, an online bookstore in China, for $75 million, which then becomes the 7th regional website of Amazon.com. joyo later becomesAmazon China.[106] |
| 2005 | February | Product | Amazon launchesAmazon Prime, a membership offering free two-day shipping within the contiguous United States on all eligible purchases for a flat annual fee of $79.[98] |
| 2005 | November | Product | Amazon launchesAmazon Mechanical Turk, an application programming interface (API) allowing any Internet user to perform "human intelligence" tasks such as transcribing podcasts, often at very low wages.[98] |
| 2006 | August 25 | Product | Amazon launchesAmazon Elastic Compute Cloud (Amazon EC2), a virtual site farm allowing users to use the Amazon infrastructure to run applications ranging from running simulations to web hosting.[107] |
| 2006 | September 19 | Product | Amazon launches Fulfillment by Amazon (FBA), giving small businesses the ability to use Amazon.com's own order fulfillment and customer service infrastructure – and customers of Amazon.com shipping offers when buying from 3rd-party sellers.[108] |
| 2006 | Legal | Amazon agrees to settle a legal dispute withToys R Us (over a partnership that gave Toys R Us exclusive rights to supply some toy products on Amazon's website) and pays $51 million.[109] | |
| 2006 | March | Product | Amazon launchesAmazon Simple Storage Service (Amazon S3), which allows other websites/developers to store computer files on Amazon's servers.[98] |
| 2007 | August | Product | CreateSpace announces launch of Books on Demand service, which makes it easy for authors who want to self-publish their books to distribute them on Amazon.com.[110] |
| 2007 | August | Product | Amazon launchesAmazonFresh, a grocery service offering perishable and nonperishable foods.[111] |
| 2007 | September 25 | Product | Amazon launchesAmazon Music, an online music store and music locker.[112] |
| 2007 | November 19 | Product | Amazon launches theAmazon Kindle.[98] |
| 2009 | July 22 | Acquisitions, Competition | Amazon acquiresZappos for $850 million.[113] |
| 2009 | October 20 | Competition | Barnes & Noble announces theNook, an eReader.[114] |
| 2010 | January | Competition | Apple introduces its own virtual bookstore, callediBooks, and then partners with five major book publishers.[115] It later convinces them to raise the price of ebooks (using the agency pricing model that gives publishers full control over ebook prices). |
| 2010 | February 1 | Competition | Microsoft launchesMicrosoft Azure, acloud computing platform that will compete withAmazon AWS over cloud services. |
| 2010 | July | Product | Amazon announced that e-book sales for its Kindle reader outnumbered sales of hardcover books for the first time ever.[116] |
| 2011 | January | Acquisitions, International | Amazon acquiresLovefilm, a DVD rental service known as theNetflix of Europe.[117] |
| 2011 | February 16 | Competition | Borders, outcompeted by Amazon, applies forChapter 11 bankruptcy.[118] |
| 2011 | February 22 | Product | Amazon rebrands itsAmazon Video service as Amazon Instant Video and adds access to 5,000 movies and TV shows for Amazon Prime members.[119][120] |
| 2011 | March 22 | Product | Amazon launches theAmazon Appstore for Android devices and the service was made available in over 200 countries.[121] |
| 2011 | July 1 | Legal | California starts collectingsales taxes on Amazon.com purchases.[122] |
| 2011 | September | Product | Amazon launchesAmazon Locker, a delivery locker system that allows users to get items delivered at specially designed lockers.[123] |
| 2011 | September 28 | Product | Amazon announces theKindle Fire, atablet computer that takes aim at Apple'siPad with a smaller device that sells at $199, compared with the $499 value of Apple's cheapestiPad.[124] |
| 2012 | April | Legal | TheDepartment of Justice files suit againstApple Inc and five major publishing houses (the "Big Five"), alleging that they colluded in 2010 to raise the price of ebooks (using the agency pricing model that gives publishers full control over ebook prices).[125] Amazon had originally set the price of ebooks at $9.99 (using the wholesale pricing model giving Amazon full control over ebook prices). |
| 2012 | March 19 | Acquisitions | Amazon acquiresKiva Systems for $775 million, a robotics company that creates robots that can move items around warehouses.[126] |
| 2012 | April | Legal | Amazon agrees to allow collection ofsales taxes in both Nevada and Texas (starting on July 1), and agrees to create 2,500 jobs and invest $200 million in new distribution centers in Texas.[127] |
| 2012 | September 6 | Product | Amazon announces the KindleFire HD series of touchscreen tablet computers.[128] |
| 2013 | March | Acquisitions | Amazon acquires social reading and book-review siteGoodReads.[129] |
| 2013 | June | International | Amazon launches inIndia.[130][131] |
| 2014 | July 25 | Product | Amazon launches theAmazon Fire.[132] |
| 2014 | August 25 | Acquisitions | Amazon announced its intent to acquire the video game streaming websiteTwitch for $970 million.[133] |
| 2014 | October | Legal | Amazon reaches agreement withSimon & Schuster, allowing the publisher to adopt the agency pricing model and set prices on its books sold on Amazon.[134] |
| 2014 | November 6 (announcement), actual rollout occurs through 2015 | Product | Amazon unveilsAmazon Echo, a wireless speaker andvoice command device that can take commands and queries, and be used to add items to the Amazon.com shopping cart, among other things.[135][136] The Alexa Voice Service that is built into Amazon Echo can also be added to other Amazon devices.[137] |
| 2014 | November | Legal | Amazon resolves dispute withHachette, allowing Hachette to adopt the agency-pricing model and set prices on Hachette books sold on Amazon.[138] |
| 2015 | July | Competition, International | Alibaba announces that it will invest $1 billion into its Aliyun cloud computing arm, some of which would go into new Aliyun international data centers. This would allow Aliyun to compete withAmazon Web Services outside of China.[139] |
| 2015 | August 26 | Product | Amazon launchesAmazon Underground, anAndroid app through which users can get gaming and other apps for free that they would otherwise have to pay for, and also get in-app purchases for free. App creator participation is voluntary. App creators are paid $0.002 for every minute a user spends in the app.[140][141][142] |
| 2015 | September 8 | Product | Amazon launches its Amazon Restaurants service that delivers food from nearby restaurants, forAmazon Prime customers inSeattle.[143][144] The service would subsequently be rolled out to many other cities. |
| 2015 | November 2 | Product | Amazon opened its first physicalretail store, a bookstore in theUniversity Village shopping center in Seattle. The store, known as Amazon Books, has prices matched to those found on the Amazon website and integrate online reviews into the store's shelves.[145] |
| 2015 | December 14 | Company | Amazon begins moving into their new headquarters campus in theDenny Triangle neighborhood of Seattle, beginning with the 38-storyAmazon Tower I (nicknamed "Doppler" after the codename forAmazon Echo).[146] The three towers are scheduled to be completed by 2020. |
| 2016 | December 7 | Delivery | Amazon Prime Air (Amazon's drone-based delivery system) makes its first delivery inCambridge in theUnited Kingdom. The successful delivery is announced a week later, on December 14, along with video.[147][148] |
| 2017 | June 15 | Acquisitions | Amazon acquiresWhole Foods for $13.7 billion, a grocery-store chain located throughout theUnited States,United Kingdom, andCanada.[149] |
| 2017 | September 7 | Company | Amazon began search forAmazon HQ2, a second company headquarters to house up to 50,000 employees.[150][151] |
| 2018 | January 18 | Company | Amazon narrows down the choices of its second headquarters location to 20 places.[152] |
| 2018 | January 22 | Company | Amazon opens a cashier-less grocery store (Amazon Go) to the public.[153] |
| 2018 | September 19 | International | Amazon launches inTurkey.[154] |
| 2018 | October 2 | Company | After widespread criticism, Amazon raises its minimum wage for all U.S. and U.K. employees to $15 an hour, including Whole Foods and seasonal employees, beginning November 1, 2018.[155][156] |
| 2018 | November 13 | Company | Jeff Bezos announces that thenew headquarters HQ2 will be split between New York City and Northern Virginia.[157] |
| 2019 | February 14 | Company | Amazon cancels plans to open new HQ2 in New York City after massive backlash from local politicians and community members. Plans in Northern Virginia remain unchanged.[158] |
| 2019 | International | Having already invested over $6 billion in India, a key growth market, Amazon acquired a 49% stake in Future Coupons, a subsidiary of Future Retail, India's second largest retail chain afterReliance Industries. The deal would give Amazon a 3.58% stake in Future Retail through warrants owned by Future Coupons.[159] |
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