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Remember When Amazon Only Sold Books? cc Sunday, June 18, 2017 latimes.com/news Remember when Amazon only sold books? A screenshot of Amazon's website in 1997. (Wayback Machine) By MAKEDA EASTER AND PARESH DAVE TIMES STAFF WRITERS hen Jeff Bezos launched his plan to sell everything and any- As consumers increasing rely on amazon.com in 1994, he thing. (“Anything with a capital A,” the Seattle-based e-commerce giant, W gave himself a 30% he told Time.) it’s hard to remember a time when chance of success — slightly better But two decades after its launch, Amazon sold only one product: than the 1 in 10 odds for Internet start Amazon has conquered online retail, books. -ups. racking up $136 billion in sales in “There's virtually nothing left that “That’s actually a very liberating ex- 2016. It’s also taken on cloud compu- they haven't touched,” said Kelly pectation, expecting to fail,” he said ting, tech gadgets and the entertain- O’Keefe, professor at the Virginia to Time magazine when it named ment world. With its blockbuster an- Commonwealth University him Person of the Year in 2000. nouncement Friday that it is buying Brandcenter. By then, sales had ticked past $1 upscale grocery chain Whole Foods, billion, but the company had yet to Amazon now plans to upend yet an- Books turn a profit. Some analysts remained other industry: grocery stores. Amazon.com launched its online skeptical that Bezos could deliver on bookselling site at a time when expand its network and be the back- bone of many more online stores. The idea of a company trusting a third party to store its proprietary data didn’t take off overnight. But Amazon can thank Apple’s iPhone for unleash- ing a tsunami of small companies try- ing to build apps for the device. Many of those apps, including dating service Tinder and the “Candy Crush” games, tapped Amazon’s systems because they were simple and affordable. As the iPhone became ubiquitous by 2010, so had Amazon Web Services. bookstore chains such as Barnes & consumers learned new ways to price- Alibaba, Google, Microsoft and Noble, Waldenbooks and Crown shop; they “unintentionally were able IBM have offered stiff competition. Books were familiar storefronts in to leverage brick-and-mortar stores as But Amazon has established itself as a American shopping malls. showrooms for their own products,” leader in cloud computing, and this Promoting itself as “Earth’s Big- O’Keefe said. year it could generate $15 billion in gest Bookstore,” Amazon opened for From computers and home goods sales. business in July 1995, using major to sex toys and shoes, there’s not The company is setting itself up to book distributors and wholesalers to much that Amazon doesn’t offer be a major foundation — though with rapidly fill its orders. “The idea of shoppers these days. unproven financial returns — for the selling books online was a foreign next generation of technology by al- one, it took a while to take off,” Amazon Web Services lowing software developers to build O’Keefe said. In the early 2000s, Amazon real- upon Alexa and machine learning, or But not long. Not beholden to the ized it had been sitting on a technolo- automated computing, tools. physical constraints of a brick-and- gy gold mine. The computer systems The computing infrastructure also mortar shop, Amazon was carrying that powered its online shop were so has helped Amazon quickly launch an more than 2.5 million titles by 1997, robust that Amazon figured it could advertising technology business that and its sales totaled $148 million that helps other shops identify potential year. The company had 1.5 million customers in more than 150 countries. The company went public on May 15, 1997 with its stock priced at $18 a share and a market capitalization of roughly $438 million. The stock closed Friday at $987.71, giving Amazon a total mar- ket value of $475 billion. The Everything Store Amazon’s success with books al- lowed the e-commerce behemoth to expand far beyond its origins. Selling electronics helped the com- pany grow rapidly and put traditional electronics stores like Circuit City out of business. It’s also possible that Amazon CEO Jeff Bezos unveils the Kindle Fire HD in 2012. (Al Seib / Los Angeles Times) customers based on their interests. With just over $1 billion in ad sales, Amazon isn't making a big dent in the businesses of industry leaders Google and Facebook. But advertising experts say Amazon has the data and software expertise to catch up fast. Hardware The company gave the world a glimpse of its enormous ambition when it starting making its own tech devices. It launched the popular Kindle e- reader in 2007, a product that has gone on to be a category leader. Mor- gan Stanley estimates that the compa- ny sold $5 billion in Kindle devices in Michelle Williams and Casey Affleck in a scene from "Manchester by the Sea." (Claire Folger / 2014. Roadside Attractions and Amazon Studios) It also got in on the tablet market with the Amazon Fire HD in 2012, Echo as the front-runner. Patrick “Alpha House” that premiered in and the video and audio streaming Moorhead, a principal analyst at Moor 2013, and the detective drama marketing in 2014 with the Amazon Insights and Strategy, once described “Bosch” in 2015. Though its quirky Fire TV — both with moderate suc- the Echo as a “Trojan horse." “Mozart in the Jungle” and cess. “You bought it to do a few simple “Transparent” won industry plaudits, Its 2014 Fire Phone — meant to things and be a speaker, then they get Amazon was still seen as an also-ran compete with the iPhone and Android you comfortable and send you weekly to Netflix’s booming original content phones — was a total flop, though, updates to let you know what you can strategy. and the company took a $170-million do with it and ultimately once you go Then, in 2017, Amazon made his- hit. It discontinued the phone a year out and get those smart lights or smart tory by becoming the first streaming later. door locks, you will be comfortable company to score an Oscar nomina- Instead of being burned by its telling it to do things,” Moorhead tion for best picture, with the Casey smartphone venture, the company said. Affleck drama “Manchester by the launched its digital home assistant Sea.” Amazon paid an eye-popping device, the Amazon Echo, in 2015. Entertainment $10 million for the domestic rights to The company was the first to release When Amazon Studios launched the film at the 2016 Sundance Film such a device, which doubled as a in 2010, few in Hollywood knew what Festival. home speaker and came packaged to make of the nascent production “To imagine two or three years with Alexa, the voice-commanded company’s ambitions. The fledgling ago that Amazon would have a film in artificial intelligence that can answer division solicited online script sub- Oscar contention would’ve been al- questions, make orders on Amazon missions, receiving thousands of most unthinkable,” Paul Dergarabedi- and play music. screenplays for feature films and tele- an, senior media analyst at comScore, While the Echo was initially slow vision pilots but developing few of said at the time. to gain traction, the launch of similar them. Amazon Studios, nominated for devices from Google and Apple intro- Run by former Walt Disney Co. seven Academy Awards, ultimately duced more customers to the relative- executive Roy Price, Amazon’s foray took home three wins — with ly new product category. into original programming started “Manchester by the Sea” being recog- Analysts describe voice-enabled modestly, with series including nized for best original screenplay and assistants as the next frontier, and the the John Goodman political satire which costs $99 a year. AmazonFresh is an additional monthly membership for $14.99. The $13.7-billion Whole Foods deal marks Amazon’s biggest foray into groceries. “The final frontier was always food,” O'Keefe said. “It's a smart deal for continuing the sales of online gro- ceries and it is likely that we'll see them grow rapidly.” What's next for Amazon? Amazon’s deal-making team, led Pedestrians make their way past a Whole Foods Market on Grand Avenue in downtown Los An- by senior vice president for business geles during the store's grand opening on December 4, 2015. (Mel Melcon / Los Angeles Times) development Jeffrey Blackburn, doesn’t appear to be slowing down. best actor and “The Salesman” getting tion, Amazon Music Unlimited, to Amazon has showed interest in ac- the nod for best foreign film. compete with Pandora and Spotify. quiring workplace chat app Slack in a Amazon’s lineup of upcoming deal that could value the start-up at $9 films includes the Judd Apatow- Groceries billion, Bloomberg reported last produced comedy “The Big Sick,” a Amazon has long had aspirations week. favorite at Sundance this year. as a grocer, starting in 1999 when it Another possible next venture for The company’s media division has invested millions in HomeGro- Amazon is same-day delivery services also grown through acquisitions. Buy- cer.com, a first-of-its-kind online su- like GrubHub or Postmates, some an- ing Twitch gave Amazon a video rival permarket that was ultimately doomed alysts say. to YouTube best known for live by the dot-com bust. “The next logical move is … stra- streams of video-game matches. Ama- It wasn’t until 2007 that the com- tegic partnerships that allow Amazon zon Prime subscribers get access to pany launched its first grocery deliv- to streamline the consumer experience special features on Twitch, which has ery service, AmazonFresh, rolling it from delivery to in-store shopping seen an uptick in productions from out slowly by invitation-only to resi- experience,” said Tom Ball, co- other genres.
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