Mod 3_1_Amazon

Mod 3_1_Amazon - Diane E. Malone MBA 502 Mod 3.1 July 18,...

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Diane E. Malone MBA 502 – Mod 3.1 July 18, 2010 Assignment 3.1: Amazon.com and its Business Model Amazon has been an internet presence since July of 1995. It was then that Jeff Bezos founded the company and initially operated from his garage, in his Bellevue, Washington home (Fair, 2002). Bezos was not intent on making millions but rather a providing the world with valuable literature without leaving their homes. With the help of a smart investor, Nick Hanauer, and $40,000, Bezos’ dream became a reality (Fair, 2002). He quickly was named the ‘number one popular number one book-related site on the Web. In just four months of operation, Amazon.com became a very popular site on the Web, making high marks on several Internet rankings. It generated recognition as the sixth best site on Point Communications' "top ten" list, and was almost immediately placed on Yahoo's "what's cool list" and Netscape's "what's new list"’ (Amazon.com’s Initial Public Offering (IPO) filing, 1997). Thanks to Madrona Venture Group's Tom Alberg, who invested $100,000 in Amazon in 1995, Bezos’ primary vision for Amazon was realized ( Frey & Cook, 2004). He envisioned an internet commerce web site through which people could obtain everything from CD’s, videos, computer hardware, software, and of course books. The company perspective states, ‘ We seek to offer the Earth's Biggest Selection and to be the Earth's most customer-centric company, where customers can find and discover anything they may want to buy online’ (Amazon.com, 2004). ‘In 1996, its first full fiscal year in business, Amazon generated $15.7 million sales -- a figure that could increase by 800 percent the following year’ (Frey & Cook, 2004; Fair, 2002). In 1997, Amazon branched out to the East coast, expanded the original operation 70% and went public with three million shares of common stock (Amazon.com, 2004). ‘Financed by a $75 million credit facility secured in late 1997, Amazon.com continued to reshape its services in 1998’ (Amazon.com, 2004). In 1998, ‘sales climbed to $1.6 billion proving that the founder's efforts to create an online powerhouse had indeed paid off’ (Amazon.com, 2004). Throughout the 1990’s Amazon continued to post net losses due to reinvesting in itself and incredible growth curve. ‘It seemed as though the profit would never cease. However, in 2001, Amazon reported a fiscal loss of $1.4 billion, and had laid off over 200 workers in the last year’,
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This note was uploaded on 01/12/2011 for the course MBA 502 taught by Professor Nicolasa.pologeorgis,ph.d. during the Spring '10 term at Jones Intl..

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Mod 3_1_Amazon - Diane E. Malone MBA 502 Mod 3.1 July 18,...

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