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Amazon.com, Inc. (NASDAQ: AMZN) is an American electronic commerce (e-commerce) company in Seattle, Washington. Amazon was one of the first major companies to sell goods by Internet, and was an iconic "stock in which to invest" of the late 1990s dot-com bubble[citation needed]. After the collapse, the public became skeptical about Amazon's business model, although it has since remained profitable.

Jeff Bezos founded Amazon.com, Inc. in 1994, and launched it online in 1995. Amazon.com started as an on-line bookstore, but soon diversified to product lines of VHS, DVD, music CDs, MP3 format, computer software, video games, electronics, apparel, furniture, food, toys, etc. Amazon has established separate websites in Canada, the United Kingdom, Germany, France, China, and Japan. It also provides global shipping to certain countries for some of its products.

Amazon was founded in 1994, spurred by what Bezos called "regret minimization framework", his effort to fend off regret for not staking a claim in the Internet gold rush. While company lore says Bezos wrote the business plan while he and his wife drove from New York to Seattle, Washington, that account appears to be apocryphal.

The company began as an online bookstore named "Cadabra.com", a name quickly abandoned for sounding like "cadaver";while the largest brick-and-mortar bookstores and mail-order catalogs for books might offer 200,000 titles, an on-line bookstore could offer more. Bezos renamed the company "Amazon" after the world's biggest river. Since 2000, Amazon's logotype is an arrow leading from A to Z, representing the desire to sell many products.

In 1994, the company incorporated in the state of Washington, beginning service in July 1995, and was reincorporated in 1996 in Delaware. The first book Amazon.com sold was Douglas Hofstadter's Fluid Concepts and Creative Analogies: Computer Models of the Fundamental Mechanisms of Thought. Amazon.com issued its initial public offering of stock on May 15, 1997, trading under the NASDAQ stock exchange symbol AMZN, at an IPO price of US$18.00 a share (U.S. $1.50 after three stock splits in the late 1990s).

Amazon's initial business plan was unusual: the company did not expect a profit for four to five years; the strategy was effective. Amazon grew steadily in the late 1990s while other Internet companies grew blindingly fast. Amazon's "slow" growth provoked stockholder complaints: that the company was not reaching profitability fast enough. When the dot-com bubble burst, and many e-companies went out of business, Amazon persevered, and, finally, turned its first profit in the fourth quarter of 2002: U.S. $5 million, just 1¢ a share, on revenues of more than U.S. $1 billion, but the profit was symbolically important.

The company remains profitable: 2003 net income was U.S.$35.3 million, U.S.$588.50 million in 2004, U.S.$359 million in 2005, and U.S.$190 million in 2006 (including a U.S.$662 million charge for R&D in 2006), nevertheless, the firm's cumulative profits remain negative. As of September 2007, the accumulated deficit stood at U.S.$1.58 billion. Revenues increased thanks to product diversification and an international presence: US$3.9 billion in 2002, U.S.$5.3 billion in 2003, U.S.$6.9 billion in 2004, U.S.$8.5 billion in 2005, and U.S.$10.7 billion in 2006. On November 21, 2005, Amazon entered the S&P 500 index, replacing AT&T after it merged with SBC Communications.

In 1999, Time Magazine named Bezos Person of the Year, recognizing the company's success in popularizing on-line shopping.

Merchant partnerships

The Web site CDNOW (cdnow.com) is powered and hosted by Amazon. Until June 30, 2006, typing ToysRUs.com into a browser would similarly bring up Amazon.com's Toys & Games tab; however, this relationship was terminated as the result of a lawsuit.

Amazon.com powers and operates retail web sites for Target, Sears Canada, Benefit Cosmetics, Bebe Stores, Timex Corporation, Marks & Spencer, Mothercare and Lacoste. For a growing number of enterprise clients, currently including the UK merchants Marks & Spencer, Benefit Cosmetics' UK entity and Mothercare, Amazon provides a unified multichannel platform from whence a customer can interchangeably interact with the retail website, standalone in-store terminals, and phone-based customer service agents. Amazon Web Services also powers AOL's Shop@AOL.

Product lines

Amazon has steadily branched into retail sales of music CDs, videotapes and DVDs, software, consumer electronics, kitchen items, tools, lawn and garden items, toys & games, baby products, apparel, sporting goods, gourmet food, jewelry, watches, health and personal-care items, beauty products, musical instruments, clothing, industrial & scientific supplies, groceries, and more.

The company launched Amazon.com Auctions, its own Web auctions service, in March 1999. However it failed to chip away at industry pioneer eBay's juggernaut growth. Amazon Auctions was followed by the launch of a fixed-price marketplace business called zShops in September 1999, and a failed Sotheby's/Amazon partnership called sothebys.amazon.com in November.

Amazon no longer mentions either Auctions or zShops on its main pages and the help page for sellers now only mentions the Marketplace. Old links to zShop now simply redirect to the Amazon home page, while old links to Auctions take users to a transactions history page. New product listings are no longer possible for either service.

Although zShops failed to live up to its expectations, it laid the groundwork for the hugely successful Amazon Marketplace service launched in 2001 that let customers sell used books, CDs, DVDs, and other products alongside new items. Today, Amazon Marketplace's main rival is eBay's Half.com service.

Beginning August 2005, Amazon began selling products under its own private label, "Pinzon"; the initial trademark applications suggested the company intended to focus on textiles, kitchen utensils, and other household goods. In March 2007, the company applied to expand the trademark to cover a larger and more diverse list of goods, and to register a new design consisting of the "word PINZON in stylized letters with a notched letter O whose space appears at the "one o'clock" position.". The list of products registered for coverage by the trademark grew to include items such as paints, carpets, wallpaper, hair accessories, clothing, footwear, headgear, cleaning products, and jewelry.

On May 16, 2007 Amazon announced its intention to launch its own online music store. The store launched in public beta September 25, 2007, selling downloads exclusively in MP3 format without digital rights management.

In August 2007, Amazon announced AmazonFresh, a grocery service offering perishable and nonperishable foods. Customers can have orders delivered to their homes at dawn or during a specified daytime window. Delivery was initially restricted to residents of Mercer Island, Washington, and was later expanded to several ZIP codes in Seattle proper. AmazonFresh also operated pick-up locations in the suburbs of Bellevue and Kirkland from summer 2007 through early 2008.

In 2008 Amazon expanded into film production and is currently funding the film The Stolen Child with 20th Century Fox.

The domain amazon.com attracted at least 615 million visitors annually by 2008 according to a Compete.com survey. This was twice the numbers of walmart.com.

A popular feature of Amazon is the ability for users to submit reviews to the web page of each product. As part of their review, users must rate the product on a rating scale from one to five stars. Such rating scales provide a basic idea of the popularity and dependability of a product.

The review feature is an important and highly influential function for customers and one of the main reasons for amazon.com’s success at selling books. As with book reviews anywhere, the buyer must beware that all reviewers have bias. Under normal circumstances, reviews give the reader at least a modest basis for evaluating a given book.

Because it is an open forum, the reader can benefit from a variety of perspectives. However, the anonymity of web reviewers increases the chances of abuse in the form of self-praise, praise from friends, or malicious criticism. This situation was confirmed in 2004 when the origin of reviews was accidentally made public on an amazon site, and some authors openly confirmed their glowing reviews of their own books.

Additionally, Amazon created a feature in recent years that allowed users to comment on reviews. This has been met with a mixed reaction, since a few of the high-profile sellers have been getting "spammed" in these forums, regardless of the quality of the reviews. Amazon has done little to enforce the rules of these forums, but did recently add an "ignore" button feature to help counteract the spamming. Nonetheless, at least one critic in the top 50 quit writing for Amazon and began contributing to another site due to the spam issues and Amazon's inability to enforce the rules.

Amazon provides an optional badging option for reviewers, e.g., to indicate the “real name” of the reviewer (based on a credit card) or to indicate that the reviewer is one of the “top” (most popular) reviewers. Some books have well over one thousand reviews (e.g. Ayn Rand’s Atlas Shrugged), but many books, especially new ones, have none.

The U.S. site generally has the most reviews, but other country sites offer the perspectives of other reviewers. A review posted on one site is not necessarily visible on another site.

Search Inside the Book is a feature which allows customers to search for keywords in the full text of many books in the catalog. The feature started with 120,000 titles (or 33 million pages of text) on October 23, 2003. There are currently about 250,000 books in the program. Amazon has cooperated with around 130 publishers to allow users to perform these searches.

To avoid copyright violations, Amazon.com does not return the computer-readable text of the book but rather a picture of the matching page, disables printing, and puts limits on the number of pages in a book a single user can access. One author observed that his entire book could be read online by searching a few words. Amazon is planning to launch Search Inside the Book internationally. Additionally, customers can purchase access to the entire book online via the Amazon Upgrade program, although the selection of books eligible for this service is currently limited.

According to information in Amazon.com discussion forums, Amazon derives about 40% of its sales from affiliates whom they call "Associates", and third party sellers who list and sell products on the Amazon website(s).

An Associate is an independent seller or business that receives a commission for referring customers to the Amazon.com site. Associates do this by placing links on their websites to the Amazon homepage or to specific products. If a referral results in a sale, the Associate receives a commission from Amazon. Worldwide, Amazon has "over 900,000 members" in its affiliate programs. Associates can access the Amazon catalog directly on their websites by using the Amazon Web Services (AWS) XML service.

Amazon was one of the first online businesses to set up an affiliate marketing program. AStore is a new affiliate product that allows Associates to embed a subset of Amazon products within, or linked to from, another website.

Amazon reported over 1.3 million sellers sold products through Amazon's worldwide web sites in 2007. Selling on Amazon has become more popular as Amazon expanded into a variety of categories beyond media, and built a variety of features to support volume selling. Unlike eBay/Paypal, Amazon sellers do not have to maintain separate payment accounts - all payments and payment security are handled by Amazon itself.

According to the Internet audience measurement website Compete.com, Amazon attracts approximately 50 million U.S. consumers to its website on a monthly basis.