Amazon.com is a remarkable company amazon from a number of view points. First and foremost, from an affiliates point of view, it is a godsend, spurring an army of successful affiliates some of whom probably make a very comfortable living by just selling Amazon products. Not only did Amazon pioneer the online retailing as we know it today (perhaps along with eBay), but it survived the terrible dot-com bubble that buried many internet startup companies of that time.
Formed in 1995 by Jeff Bezos its current Chairman, President and CEO, the company quickly gained prominence in the fledgling electronic commerce arena also known as e-commerce or e-comm. Bezos clearly understood the booming potential of the internet at that time and set in motion a plan to monetize it.
At that point, Bezos identified five items which in his mind would sell well over the internet. These consisted of compact discs, computer hardware, computer software, videos and books. However, he eventually concentrated on just selling books and within a space of four months from its launch, Amazon.com had become one of the top ten sites on the internet which went to demonstrated just how great Bezos’s idea was.
The dot-com bubble also known as the dot-com boom, the internet bubble and the information technology bubble was a speculative bubble which saw the technology stocks in the world stock markets and in particular on the influential and tech-heavy Nasdaq market on Wall Street, New York, USA soar to new, dizzy heights.
It seemed investors were embracing wholeheartedly any company that utilised the internet in any form in its business plan contributing significantly to its revenue. The joke of the moment was if you had an “e” in front of your company name then the investors would start throwing money at you. No questions were asked, or perhaps not as many as would be if it were a “normal” company seeking investors’ funds. It seemed at the time that the internet had ushered in an era where e-commerce companies could not go out of business even if they stretched the tried and tested rules that governed successful companies.
Unfortunately the cold hard reality of economics caught up with these companies. Despite the euphoria, a lot of these dot-com companies in reality were struggling to make any money and consequently their price-to-earnings (P/E) ratio which is what investors normally pay a great deal of attention to was “throbbing red” indicating danger. With any normal bricks-and-mortar company, such extreme distress signs would send investors cowering.
These e-commerce companies kept on asking for more and more funding from their investors just to keep afloat with the promise of some profit in the distant future. Investors finally started to ask some tough questions regarding these companies and the noun “no” started to replace the “yes” in their meetings. Finally, in March 2000, the speculative bubble finally “popped” taking many e-commerce companies down with it.
Amazon.com survived the bubble, but only just. In any case, it wasn’t a typical internet company by being merely virtual like a lot of those companies that disappeared with the bubble. It owned more than some swanky office with unusual furniture. It stored and supplied physical goods so had to own warehouses. Amazon came to epitomise a company that balanced the new excitement of the internet with the boring but established discipline of a “bricks-and-mortar” company, the so called “clicks-and-mortar” company. Amazon only turned profitable in later half of 2001, long six years after it started trading.
Today, Amazon.com is one of the biggest companies in the world. In 2011, it reported revenue of 48 billion USD, from which net income was 631 million USD. The operations are truly global employing 69,000 people in total. In order to serve its markets better, Amazon now has local websites in major markets such as the UK (Amazon.co.uk), France (Amazon.fr), Germany (Amazon.de) etc.