1. M ARCHING T OWARDS P ROFITABILITY B Y P ETER M OUA B US 550 T HE C ONTEMPORARY F IRM

2. S HORT History Founded by Jeff Bezos in 1994 Recognized web usage was growing at 2,300% a year. He sought to find the first best product to sell online. “Books” Amazon opened its online bookstore in July 1995 Amazon went public on May 15, 1997 sold 3 million shares at $18 per share

3. T RIVIA Q UESTION What was Amazon.com’s original name?

4. T RIVIA Q UESTION Cadabra

5. C USTOMER V ALUE Focused on Customer’s online experience: Features: “1-Click”: Fast/Secure credit card processing easy and rich merchandise evaluation: pictures, descriptions, and reviews Amazon Personalization: “build the right store for every customer” recognize, remember, and learn Branding: e-commerce and customer satisfaction.

6. F ULFILLMENT Minimum of Bricks: Minimal Inventory and rapid fulfillment Automated interfaces for sorting and organizing orders How it was done: Randomly processed and stored, Hand picked, Hand packed, and shipped. How it is done now: Amazon Acquired Kiva Systems for $775M

7. Amazon Prime Currently around 10 million members enrolled Results in about 1/3 of Amazon’s operating income Recently increased annual fee from $79 to $99 Prime benefits: –Unlimited free two-day shipping on eligible purchases (20 million items are in the prime category) –Unlimited streaming with Prime instant video –Ability to borrow books from the Kindle owners’ lending library

8. Vision to improve upon the physical book. In October 2004 a small team moved into a shared space in Palo Alto law library and got to work as Lab126. The Lab126 name originated from the arrow in the Amazon logo. On November 19, first Kindle e-reader launched with 90,000 e- books. 5.5 hours later, Kindle was sold out after 5.5 hours of its announcement. The team has expanded to products like the Kindle Keyboard, Kindle Touch and Kindle Paperwhite e-readers to Kindle Fire tablets.

9. Electronics from Lab126 2007 - Amazon Kindle E-book Reader: Reads like paper with no glare, even in bright sunlight. Current versions: Kindle, Paperwhite, Paperwite 3G, and DX 2011 - Kindle Fire Table Computer: Runs Fire OS 3.0 “Mojito”. Current versions: Fire HD, HDX, HD 8.9”, Fire HDX 8.9” 2014 - Amazon Fire TV: enables television sets to access internet programing, streaming shows from Amazon Prime, and video games. Features voice recognition on the remote and a gaming controller can be purchased. Smartphone rumor: 6 camera across the face to enable 3D images and ability to use gestures for the OS. Projected to release this year.

10. Electronics from Lab126

11. Patents As of 2013, Amazon has 1,263 Patents. Examples: Affiliates Program: Allows owners of other Web sites to refer customers to Amazon in exchange for a referral fee. 1-Click: allows customers to shop without entering their shipping and billing information every time they purchase an item. Build-a-box: cranks out custom-designed boxes for odd-shaped shipments. Anticipatory Shipping: Uses historical data to predict what a customer will buy next. Amazon would pre-ship the item in advance in anticipation that the customer will buy it.

12. A CQUISITIONS & I NVESTMENTS CompanyDateCompanyDateCompanyDate BookpagesApril 27, 1998Leep Technology Inc.Dec. 1999Animoto May 2008 TelebookApril 27, 1998Greenlight.comJan. 2000Farbric.com June 2008 Internet Movie Database (IMDB)April 27, 1998GregManningFeb. 2000Box Office Mojo July 2008 Sage Enterprises (Planet All)Aug. 4, 1998Basis Tech.Feb. 2000Engine Yard Inc. July 2008 Junglee CorporationAug. 4, 1998kozmo.com March 2000Elastra CorpAug. 2008 Drugstore.comFeb. 1999WineShopper.comApril 1, 2000ShelfariAug. 2008 GeoworksFeb. 1999audible.comJan. 2000Reflexive Entertainment Inc.Oct. 2008 pets.comMarch 29, 1999Catalogcity.comNov. 2001AbeBooks.comDec. 2008 LiveBid.comApril 24, 1999Egghead.comDec. 2001JustbooksDec. 2008 bibliofindApril 24, 1999OurHous.comDec. 2001IberLibro.comDec. 2008 MusicFileApril 24, 1999CDNowDec. 2002Bookfiner.comDec. 2008 exchange.comApril 24, 1999joyo.comAug. 2004Gojaba.comDec. 2008 Alexa InternetApril 26, 1999BookSurgeApr. 2005FillZDec. 2008 Accept.comApril 25, 1999 Mobipocket.com Apr. 2005LibraryThingDec. 2008 HomeGrocer.comMay 18, 1999 CustomFlix June 2005ChrislandsDec. 2008 Gear.comJuly 14, 1999 Shopbop.com Feb. 2006YieldexFeb. 2009 Tool Crib of the NorthOct. 1999wikia Inc.Dec. 2006Lexcycle Inc.Apr. 2009 Convergence CorporationOct. 1999Dpreview.com May 2007BookTour.comApr. 2009 MindCorps1999Brilliance Audio May 2007FoodistaMay. 2009 Della.comNov. 1999Amie StreetAug. 2007Talk Market Inc.Jun. 2009 Back to Basics ToysNov. 1999withoutaboxJan. 2008Snap Tell Inc.Jun. 2009 Ashford.comDec. 1999Lovefilm.comApr. 2008Zappos.comJuly 1, 2009

13. Financials 53-week high $408.06 1 st Quarter revenue grew 23% over the year to $19.74 Billion EPS of $0.23

14. Financials Continue Why the down slope? Amazon focuses on long-term competitive advantage Capital Expenditures in infrastructure Innovation Spending Therefore Amazon continues to operate with negative Operating Income. Spent $1.1 billion on additional investments to support technology infrastructure including Amazon Web Service, and fulfillment operations. Amazon is investing more than they did in the past. Domestically and internationally. Recent investments Italy and Spain and continued in China.

15. Marching Towards Profitability Conclusion: Currently not profitable because they are spending more than their profits –Infrastructure –Innovation Focuses on long-term competitive advantage Continue to grow at a fast pace –New technologies Fire TV Smartphone –International Growth Austria, Canada, China, France, Germany, Italy, Japan, Spain, UK

16. Multiple Choice Questions 1.How much did Amazon’s 2014 1 st quarter revenue grow from the previous quarter? a.8% b.17% c.23% d.31% 2.What robotic company did Amazon acquire to improve the customer fulfillment process? a.AeroViroment b.Kiva Systems c.iRobot d.The Robot Company 3.You can play videogames on the new Amazon Fire TV. True False

17. Works Sited 1.Byers, Ann (2006), Jeff Bezos: the founder of Amazon.com, The Rosen Publishing Group, pp. 46–47Jeff Bezos: the founder of Amazon.com 2.Himelson, Jeffrey (2014), Amazon: Impatient Investors Are Giving You A Golden Opportunity; http://seekingalpha.com/article/2178773-amazon-impatient- investors-are-giving-you-a-golden-opportunityhttp://seekingalpha.com/article/2178773-amazon-impatient- investors-are-giving-you-a-golden-opportunity 3.Lab126 (2014), http://www.lab126.com/welcome.htmhttp://www.lab126.com/welcome.htm 4.Anders, George (2013), Amazon’s 1,263 Patents Reveal Retailing’s High-Tech Future; http://www.forbes.com/sites/georgeanders/2013/11/14/amazons-1263- patents-reveal-retailings-high-tech-future/http://www.forbes.com/sites/georgeanders/2013/11/14/amazons-1263- patents-reveal-retailings-high-tech-future/ 5.Lomas, Natasha (2014), Amazon Patents “Anticipatory” Shipping – to Start Sending Stuff Before You’ve Bought It”; http://techcrunch.com/2014/01/18/amazon-pre-ships/ http://techcrunch.com/2014/01/18/amazon-pre-ships/ 6.Slawski, Bill (2009), Amazon Acquisitions and Investments; http://www.seobythesea.com/2006/10/amazon-acquisitions-and-investments/ http://www.seobythesea.com/2006/10/amazon-acquisitions-and-investments/