Amazon Case
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AMAZON.COM Expanding Beyond Books
eff Bezos, the CEO of Amazon.com, was pleased that his three year-old online start-up, www.amazon.com, had gone from being an underground sensation for book-lovers on the World Wide Web (WWW) to one of the most admired Internet retailers on Wall Street. To date, his attempts to transform the traditional book-retailing format through technology that taps the interactive nature of the Internet has been very successful. Although his company garnered rave reviews from respected Wall Street Analysts, Bezos clearly understood that this was not the moment to dwell on the past. In the fast moving world of the Internet, he and his firm continued to face many formidable challenges. This case describes how Bezos has managed to build a rapidly growing retail business on the Internet and the challenges he and his top management currently face as other industry giants such as Barnes & Noble, and Bertelsman, the German Publishing Conglomerate, attempt to imitate his model of competition.
COMPANY BACKGROUND
In 1994, Jeffrey Bezos, a computer science and electrical-engineering graduate from Princeton University, was the youngest senior vice-president in the history of D.E. Shaw, a Wall Streetbased investment bank. During the summer of 1994, one important statistic about the Internet caught his attention, and imagination—Internet usage was growing at 2300 percent a year. His reaction: “Anything that’s growing that fast is going to be ubiquitous very quickly. It was my wake-up call.” He left his job at D.E. Shaw and drew up a list of 20 possible products that could be sold on the Internet. He quickly narrowed his prospects to music and books. Both shared a potential advantage for online sale: far too many titles for a single store to stock. He chose books.
There are so many of them! There are 1.5 million English-language books in print, 3 million books in all languages worldwide. This volume defined the opportunity. Consumers keep
AMAZON.COM Expanding Beyond Books
eff Bezos, the CEO of Amazon.com, was pleased that his three year-old online start-up, www.amazon.com, had gone from being an underground sensation for book-lovers on the World Wide Web (WWW) to one of the most admired Internet retailers on Wall Street. To date, his attempts to transform the traditional book-retailing format through technology that taps the interactive nature of the Internet has been very successful. Although his company garnered rave reviews from respected Wall Street Analysts, Bezos clearly understood that this was not the moment to dwell on the past. In the fast moving world of the Internet, he and his firm continued to face many formidable challenges. This case describes how Bezos has managed to build a rapidly growing retail business on the Internet and the challenges he and his top management currently face as other industry giants such as Barnes & Noble, and Bertelsman, the German Publishing Conglomerate, attempt to imitate his model of competition.
COMPANY BACKGROUND
In 1994, Jeffrey Bezos, a computer science and electrical-engineering graduate from Princeton University, was the youngest senior vice-president in the history of D.E. Shaw, a Wall Streetbased investment bank. During the summer of 1994, one important statistic about the Internet caught his attention, and imagination—Internet usage was growing at 2300 percent a year. His reaction: “Anything that’s growing that fast is going to be ubiquitous very quickly. It was my wake-up call.” He left his job at D.E. Shaw and drew up a list of 20 possible products that could be sold on the Internet. He quickly narrowed his prospects to music and books. Both shared a potential advantage for online sale: far too many titles for a single store to stock. He chose books.
There are so many of them! There are 1.5 million English-language books in print, 3 million books in all languages worldwide. This volume defined the opportunity. Consumers keep