Amazon.com

http://Amazon.com is one of the most well-known and successful Internet startup companies. Beginning as an online bookstore and expanding into other areas of online retail, http://Amazon.com pioneered several key features of online shopping, or what is now called e-commerce.

http://Amazon.com was founded in 1995 by Jeff Bezos. After doing research into the possibilities of Internet commerce, Bezos decided a bookseller was an ideal concept for an online retailer. While other industries had relatively successful mail-order businesses, mail-order books had always been difficult because of the sheer number of titles in print. A mail-order catalogue that even approached the number of books in print would have been about the size of an urban telephone book and too expensive to mail.

Bezos' concept was that an online bookseller could take advantage of the ability of computers and the Internet to process vast amounts of data. Where mail-order and “bricks and mortar” bookstores could provide only a small number of the books in print at any given time, Amazon could provide access to the entire list, online, and without many of the overhead costs of traditional bookselling. For instance, in order to grow significantly, a traditional chain of booksellers needs to open new stores. This involves acquiring the land, building the stores, training and hiring employees, and maintaining additional inventory. An Internet bookstore can grow simply by attracting more users to its site and adjusting its inventory accordingly. Amazon offers a searchable list of over 3.1 million books, more than 15 times that of any physical bookstore, and without much of the overhead. Though Amazon incurred high initial costs in editorial staff, software, and hardware, their long-terms costs would, in theory, be lower than those of a traditional bookseller.

Using software developed by programmer Shel Kaphan, http://Amazon.com went online in July 1995. Its user interface was as important as its business concept. From the beginning, Amazon's Web site loaded quickly and was easy to use. It patented a “1-click” buying option, which meant that customers could buy anything on the site with a single mouse-click once they had provided basic purchasing information such as name, shipping address, and payment method.

Amazon pioneered a number of other strategies for online retailing. In order to make its site more attractive, and to foster repeat business, Amazon hired teams of writers and editors to provide commentary on items the company had for sale, and to create lists of suggested purchases. Amazon also allowed users to provide commentary of their own, resulting in high levels of user participation, then added a Listmania feature that allows users to create public lists of their favorite items by category. Shoppers can also keep a wish list of items they'd like to purchase at a future time, and Amazon automatically recommends new items based on a shopper's previous purchases. Amazon was the first commerce site to use this “collaborative filtering” technology.

By 1997, Amazon was a significant player in the retail book market, pulling in larger revenues per employee than massive and established competitors Barnes and Noble, Borders, and B. Dalton, although still trailing in overall sales. After an initial public offering in 1997, Amazon's stock prices soared during the dot-com stock market boom of the late 1990s. Bezos was named Time magazine's Man of the Year in 1999, and Amazon was cast as a model of a successful Internet business.

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