Amazon Company History
It all began in 1994 with an idea and one year later with a handful of customers. Almost 20 years later, the company has around 25 million customers in 160 countries around the world. The founder, Jeff Bezos, was voted “Man of the Year” by the news magazine “Time” in 1999. We’re talking about the US company Amazon.com, which, according to its own statements, is the market leader in Internet trading and offers the largest selection of books, videos and CDs in the world – with the product range still being continually expanded today.
Amazon.com, Inc. was founded in 1994 in the US state of Washington by the computer scientist Jeff Bezos, born on 12 January 1964, as an online bookstore. He had previously developed the idea for an electronic bookstore with David E. Shaw, in whose financial company Bezos was employed as a vice president until shortly before the founding of Amazon. The naming of Jeff Bezos’ new online company was based on
the strongly ramified South American Amazon godfather, which is considered the most water-rich river on earth and was intended to symbolize the company’s aspired supremacy. It was also important to Bezos that his new company began with an “A”, the first letter of the alphabet.
In July 1995, Jeff Bezos invited some 300 friends and acquaintances to test his new “online baby”. In its first month, Amazon.com sold books to customers in all US states and an additional 45 countries worldwide. By the second month Amazon was already turning over about $20,000 per week. After these surprisingly rapid initial successes, Amazon subsequently opened up to the general public. In 1996, the young company’s sales had already risen to 15.7 million US dollars, and in 1997, after the company went public, they continued to grow to 147.8 million US dollars. Around 35 percent of the shares remained in the family ownership of the founder.
In 1998 Amazon founded the first country-specific websites worldwide, including in Germany. In April 1998, the US company had acquired the then leading German Internet mail order bookseller, ABC-Bücherdienst GmbH, which operated the successful Telebuch.de website through its subsidiary Telebook, Inc. and had branches in Spain, the USA and Namibia. In October 1998 Telebuch.de was renamed Amazon.de.
The book division was quickly followed by other product segments. With the integrated sales platforms “Marketplace” and the “z-Shops” an almost unlimited portfolio was soon available. Over time, Amazon’s own brands, such as the eBook brand “Kindle” (2007), the furniture brand “Strathwood” or the home textiles brand “Pinzon” supplemented the portfolio, and in 2009 the company acquired the shoe mail order company Zappos. In 2011, Amazon sold more electronic than printed books for the first time and in 2012 Amazon.com took over the book-on-demand provider Booksurge.com. The company also invested continuously in the further development of customer-friendly Internet technologies: Among other things, it patented the 1-Click ordering process and developed the “Recommandation Engine”.
By the end of 1999, sales had already reached around one billion US dollars. However, Amazon’s losses were still 300 million dollars. It was not until 2002 that the company made its first profits. But when the dot.com bubble burst at the beginning of the new millennium, things became extremely tight for Amazon as well. For investors, this meant that after the initial ups and downs, they now fell into a deep black hole for a long time. The price fluctuations expressed in figures: in 1998 the value of a share was around 100 US dollars, in mid-1999 the value fell to 50 US dollars, only to rise again to over 100 US dollars at the end of 1999. By 2006, the value had fallen to just 20 US dollars. It was not until 2009 that the share price began to rise continuously again. In 2012, the turnover was 61.1 billion US dollars and the value of an Amazon share was over 200 US dollars in August 2013.
But over the years Amazon also made negative headlines more and more frequently. Primarily because of dubious working conditions. The most important points of criticism: temporary
Working conditions, unpaid “induction training” and the inhumane accommodation of temporary workers, as well as warnings in the event of non-compliance with targets, as a means of employee pressure. In 2013, Amazon went on strike in Germany for the first time, as the company was classified as a “wage pusher” by the Ver.di trade union. In addition, the company’s working hours were denounced.
In 2013, it also became known that Amazon had gained competitive advantages over small bookstores through an extreme linking with German libraries, and that it was taking advantage of considerable tax advantages with legal booking tricks, for example, and was reducing its tax payments in Germany to a minimum. Practices that were increasingly met with displeasure, especially because the group had initially received substantial subsidies as part of its economic development in Germany, but now taxed its profits in Luxembourg.
The company’s portfolio also came under constant criticism: For example, constitutional protectors of the state of Brandenburg had already discovered in 2009 that the NPD was selling right-wing extremist propaganda material via Amazon. It had previously become known that Amazon had already distributed inciting and anti-Semitic writings in the USA. At the same time, erotic and homosexual topics were removed from the internal bestseller lists. Data protectionists criticised the possible passing on of customer data and consumer protectionists criticised the sale of food via Amazon – to name just a few of the critical issues.
Amazon had expanded so much over the years that Amazon founder Jeff Bezos was able to buy Washington, D.C.’s largest daily newspaper, “The Washington Post”, on August 5, 2013.