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Amazon.com, Inc.
Type of businessPublic
Type of site
E-commerce
Available inEnglish, Japanese, German, French, Italian & Chinese
Traded asNasdaq: AMZN
NASDAQ-100 Component
S&P 500 Component
Founded1994
HeadquartersSeattle, Washington, U.S.
Area servedWorldwide
Founder(s)Jeffrey P. Bezos
Key peopleJeffrey P. Bezos
(Chairman, President & CEO)
IndustryOnline shopping
Cloud computing
ProductsAmazon.com
Zappos
Amazon Studios
Amazon Web Services
A2Z Development
A9.com
Alexa Internet
Audible.com
Endless.com
IMDb
Kindle
Lovefilm
Woot
RevenueIncrease US$ 34.204 billion (2010)[1]
Operating incomeIncrease US$ 1.406 billion (2010)[1]
Net incomeIncrease US$ 1.152 billion (2010)[1]
Total assetsIncrease US$ 18.797 billion (2010)[1]
Total equityIncrease US$ 6.864 billion (2010)[1]
Employees33,700 (2010)[1]
URLAmazon.com
AdvertisingWeb banners
Videos
Launched1995

Amazon.com, Inc. (Nasdaq: AMZN) is a US-based multinational electronic commerce company. Headquartered in Seattle, Washington, it is the largest online retailer in the United States, with nearly three times the Internet sales revenue of the runner up, Staples, Inc., as of January 2010.

Jeff Bezos founded Amazon.com, Inc. in 1994 and the site went online in 1995. The company was originally named Cadabra, Inc., but the name was changed when it was discovered that people sometimes heard the name as "Cadaver". The name Amazon.com was chosen because the Amazon River is one of the largest rivers in the world and so the name suggests large size, and also in part because it starts with "A" and therefore would show up near the beginning of alphabetical lists. Amazon.com started as an online bookstore, but soon diversified, selling DVDs, CDs, MP3 downloads, computer software, video games, electronics, apparel, furniture, food, and toys. Amazon has established separate websites in Canada, the United Kingdom, Germany, France, Italy, Japan, and China. It also provides international shipping to certain countries for some of its products.

History

Jeff Bezos, the founder of Amazon.com

Amazon was founded in 1995,[3] spurred by what Bezos called "regret minimization framework", his effort to fend off regret for not staking a claim in the Internet gold rush.[4] Company lore says Bezos wrote the business plan while he and his wife drove from New York to Seattle,[5] although that account is disputed. Bezos flew from New York to Texas, where he picked up a car from a family member, and then drove from Texas to Seattle.

The company began as an online bookstore;[6] while the largest brick-and-mortar bookstores and mail-order catalogs for books might offer 200,000 titles, an online bookstore could offer more. Bezos named the company "Amazon" after the world's largest river. Since 2000, Amazon's logotype is an arrow leading from A to Z, representing customer satisfaction (as it forms a smile); a goal was to have every product in the alphabet.[7]

Amazon was incorporated in 1994, in the state of Washington. In July 1995, the company began service and sold its first book on amazon.com - Douglas Hofstadter's Fluid Concepts and Creative Analogies: Computer Models of the Fundamental Mechanisms of Thought.[8] In 1996, it was reincorporated in Delaware. Amazon issued its initial public offering of stock on May 15, 1997, trading under the NASDAQ stock exchange symbol AMZN, at an IPO price of US$18.00 per share ($1.50 after three stock splits in the late 1990s).

Barnes and Noble filed a lawsuit on 12 May 1997, alleging that Amazon's claim to be "The world's largest bookstore" was false. They asserted "[It] isn't a bookstore at all. It's a book broker." The suit was later settled out of court. Amazon continued to call itself "The world's largest bookstore."[9] This was followed by Walmart filing suit on 16 October 1998, alleging that Amazon had stolen trade secrets by hiring former Walmart executives. Although this suit was settled out of court, it led to work restrictions and reassignment of the former Walmart executives.[9]

Amazon's initial business plan was unusual: the company did not expect a profit for four to five years. Its "slow" growth provoked stockholder complaints that the company was not reaching profitability fast enough. When the dot-com bubble burst, and many e-companies went out of business, Amazon persevered, and finally turned its first profit in the fourth quarter of 2001: $5 million or 1¢ per share, on revenues of more than $1 billion, but the modest profit was important in demonstrating the business model could be profitable. In 1999, Time magazine named Bezos Person of the Year, recognizing the company's success in popularizing online shopping.

Acquisitions

Investments

Spinoffs

Merchant partnerships

The website CDNOW is powered and hosted by Amazon. Until June 30, 2006, typing ToysRUs.com into a browser would similarly bring up amazon.com's Toys & Games tab; however, this relationship was terminated as the result of a lawsuit.[34] Amazon also hosted and ran the website for Borders bookstores, but this ceased in 2008.[35]

Amazon.com powers and operates retail web sites for Target, Sears Canada, Benefit Cosmetics, bebe Stores, Timex, Marks & Spencer, Mothercare, and Lacoste. For a growing number of enterprise clients, currently including the UK merchants Marks & Spencer, Benefit Cosmetics' UK entity, edeals.com, and Mothercare, Amazon provides a unified multichannel platform where a customer can seamlessly interact with some people that they call the retail website, standalone in-store terminals, or phone-based customer service agents. Amazon Web Services also powers AOL's Shop@AOL.

Business results

Amazon's net income was $35 million in 2003, $588 million in 2004, $359 million in 2005, and $190 million (including a $662 million charge for R&D) in 2006. Retained earnings were negative $1.8 billion in 2006, negative $1.4 billion in 2007, negative $730 million in 2008, and $172 million in 2009.[36] Annual revenues, aided by product line expansion and rapid growth in international sales, grew from $3.9 billion in 2002 to $10.7 billion by 2006.

On November 21, 2005, Amazon entered the S&P 500 index, and, on December 31, 2008, the S&P 100 index. On March 26, 2010, Amazon had a higher market cap than Target Corporation, Home Depot, Costco, Barnes and Noble, and Best Buy, only lagging behind that of Walmart among American brick and mortar retailers.[37]

Locations

Amazon.com has offices, fulfillment centers, customer service centers and software development centers across North America, Latin America, Europe and Asia.[38]

Headquarters

amazon.com's former headquarters in the PacMed building in Beacon Hill, Seattle.

The company's global headquarters are located on Seattle's South Lake Union. It has offices throughout other parts of greater Seattle, including Union Station, its former headquarters at the PacMed build in Beacon Hill, and The Columbia Center.

Amazon has announced plans to move its headquarters to the South Lake Union neighborhood of Seattle beginning in mid-2010, with full occupancy by 2011. This move will consolidate all Seattle employees onto the new 11-building campus.[39]

Software development centers

The company employs software developers in centers across the globe. While much of Amazon's software development is in Seattle, other locations include Slough and Edinburgh (Scotland), Dublin (Ireland), Bangalore, Chennai, and Hyderabad (India), Cape Town (South Africa), Iaşi (Romania), Shibuya, Tokyo (Japan), Beijing (China), and San Francisco (United States).

Fulfillment and warehousing

Fulfillment centers are located in the following cities, often near airports. These centers also provide warehousing and order-fulfillment for third-party sellers:[40]

  • North America:
These U.S. distribution centers have been closed: Dallas/Fort Worth, TX; Red Rock, Nevada; Chambersburg, Pennsylvania; Munster, Indiana; McDonough, Georgia.[42][43]
  • Europe:
Amazon.co.uk warehouse, Glenrothes.
  • Asia:

Products and services

Third-generation Amazon Kindle

Amazon product lines include books, music CDs, videotapes and DVDs, software, consumer electronics, kitchen items, tools, lawn and garden items, toys & games, baby products, apparel, sporting goods, gourmet food, jewelry, watches, health and personal-care items, beauty products, musical instruments, clothing, industrial & scientific supplies, and groceries.

The company launched amazon.com Auctions, a Web auctions service, in March 1999. However, it failed to chip away at industry pioneer eBay's large market share. amazon.com Auctions was followed by the launch of a fixed-price marketplace business, zShops, in September 1999, and the now defunct Sotheby's/Amazon partnership called amazon.com in November. Auctions and zShops evolved into Amazon Marketplace, a service launched in November 2000 that let customers sell used books, CDs, DVDs, and other products alongside new items. Today, Amazon Marketplace's main rival is eBay's Half.com service.

In August 2005,[47] Amazon began selling products under its own private label, "Pinzon"; the trademark applications indicated that the label would be used for textiles, kitchen utensils, and other household goods.[47] In March 2007, the company applied to expand the trademark to cover a more diverse list of goods, and to register a new design consisting of the "word PINZON in stylized letters with a notched letter O whose space appears at the "one o'clock" position."[48] Coverage by the trademark grew to include items such as paints, carpets, wallpaper, hair accessories, clothing, footwear, headgear, cleaning products, and jewelry.[48] On September 2008, Amazon filed to have the name registered. USPTO has finished its review of the application, but Amazon has yet to receive an official registration for the name.

Amazon MP3, its own online music store, launched in the US on September 25, 2007, selling downloads exclusively in MP3 format without digital rights management.[49] This was the first online offering of DRM-free music from all four major record companies.[50][51][52][53]

In August 2007, Amazon announced AmazonFresh,[54] a grocery service offering perishable and nonperishable foods. Customers can have orders delivered to their homes at dawn or during a specified daytime window. Delivery was initially restricted to residents of Mercer Island, Washington, and was later expanded to several ZIP codes in Seattle proper.[55] AmazonFresh also operated pick-up locations in the suburbs of Bellevue and Kirkland from summer 2007 through early 2008.

In 2008 Amazon expanded into film production, producing the film The Stolen Child with 20th Century Fox.[56]

Amazon's Honor System was launched in 2001 to allow customers to make donations or buy digital content, with Amazon collecting a percentage of the payment plus a fee. The service was discontinued in 2008.[57] and replaced by Amazon Payments. Amazon launched Amazon Web Services (AWS) in 2002, which provides programmatic access to latent features on its website. Amazon also created "channels" to benefit certain causes. In 2004, Amazon's "Presidential Candidates" allowed customers to donate $5–200 to the campaigns of 2004 U.S. presidential hopefuls. Amazon has periodically reactivated a Red Cross donation channel after crises such as the 9/11, Hurricane Katrina, and the 2004 earthquake and tsunami in the Indian Ocean. By January 2005, nearly 200,000 people had donated over $15.7 million in the US.[58]

Amazon Web Services

Main article: Amazon Web Services

Amazon Web Services (AWS) was first launched as a public beta of Amazon Elastic Compute Cloud running Microsoft Windows Server and Microsoft SQL Server.[59] This was later expanded to several operating systems including various flavors of Linux and OpenSolaris.

In March 2006, Amazon launched an online storage service called Amazon Simple Storage Service (Amazon S3). An unlimited number of data objects, from 1 byte to 5 gigabytes in size, can be stored in S3 and distributed via HTTP or BitTorrent. The service charges monthly fees for data stored and transferred. In 2006, Amazon introduced Amazon Simple Queue Service (Amazon SQS), a distributed queue messaging service, and product wikis (later folded into Amapedia) and discussion forums for certain products using guidelines that follow standard message board conventions. Also in 2006, Amazon introduced Amazon Elastic Compute Cloud (Amazon EC2), a virtual site farm, allowing users to use the Amazon infrastructure to run applications ranging from running simulations to web hosting. In 2008, Amazon improved the service adding Elastic Block Store (EBS), offering persistent storage for Amazon EC2 instances and Elastic IP addresses, static IP addresses designed for dynamic cloud computing. Amazon introduced SimpleDB, a database system, allowing users of its other infrastructure to utilize a high reliability high performance database system.

Amazon continues to refine and add services to AWS, adding such services as Scalable DNS service (Amazon Route 53), payment handling, and AWS specific APIs for their Mechanical Turk service.

Amazon Prime

Amazon Prime offers free two day shipping with no minimum purchase amount for a flat annual fee, as well as discounted priority shipping rates.[60] Amazon launched the program in the continental United States in 2005, in Japan, the United Kingdom and Germany in 2007, and in France (as "Amazon Premium") in 2008. In February 2011, Amazon Prime membership was expanded to include access to 5,000 instant streaming movies and TV shows at no additional cost.[61]

Other services

Launched in 2005, Amazon Shorts offers exclusive short stories and non-fiction pieces from best-selling authors for immediate download. By June 2007, the program had over 1,700 pieces and was adding about 50 new pieces per week. In November 2005, amazon.com began testing Amazon Mechanical Turk, an application programming interface (API) allowing programs to dispatch tasks to human processors.


In 2007 Amazon launched Amapedia, a now-defunct wiki for user-generated content to replace ProductWiki, the video on demand service Amazon Unbox, and Amazon MP3, which sells downloadable MP3s.[62] Amazon's terms of use agreements restrict use of the MP3s, but Amazon does not use DRM to enforce those terms.[63] Amazon MP3 sells music from the Big 4 record labels EMI, Universal, Warner Bros. Records, and Sony BMG, as well as independents. Prior to the launch of this service, Amazon made an investment in Amie Street, a music store with a variable pricing model based on demand.[64] Also in 2007 Amazon launched Amazon Vine, which allows reviewers free access to pre-release products from vendors in return for posting a review, as well as payment service specifically targeted at developers, Amazon FPS.[citation needed]

In November 2007, Amazon launched Amazon Kindle, an e-book reader which downloads content over "Whispernet", via the Sprint Nextel EV-DO wireless network. The screen uses E Ink technology to reduce battery consumption to provide a more legible display. As of March, 2011, the stated library numbers over 850,000 titles. In December 2007, In August 2007, Amazon launched an invitation-only beta-test for online grocery delivery. It has since rolled out in several Seattle, Washington suburbs.

In January 2008 Amazon began rolling out their MP3 service to subsidiary websites worldwide.[65] In December, 2008, Amazon MP3 was made available in the UK. In September, IMDB and amazon.com launched a Music metadata browsing site with wiki-like user contribution.[66] In November, Amazon partnered with Fisher-Price, Mattel, Microsoft and Transcend to offer products with minimal packaging to reduce environmental impact and frustration with opening "clamshell" type packaging.[54] Amazon Connect enables authors to post remarks on their book pages to customers. WebStore allows businesses to create custom e-commerce websites using Amazon technology. Sellers pay a commission of 7 percent, including credit-card processing fees and fraud protection, and a subscription fee of $59.95/month for an unlimited number of webstores and listings.

In July 2010 Amazon announced that e-book sales for its Kindle reader outnumbered sales of hardcover books for the first time ever during the second quarter of 2010. Amazon claims that during that period sold 143 e-books for every 100 hardcover books, including hardcovers for which there is no digital edition; and during late June and early July sales rose to 180 digital books for every 100 hardcovers.[67]

In 2010 Amazon launched two publishing imprints, AmazonEncore[68] and AmazonCrossing.[69] AmazonEncore publishes books that were previously self-published.[70] AmazonCrossing translates foreign works into English, the first books published—the French-language novel The King of Kahel and the German-language novel The Hangman's Daughter—were released in November and December 2010, respectively.[71]

Amazon.com exclusives

An Amazon.com exclusive is a product, usually a DVD, that is available exclusively on Amazon.com. Some DVDs are produced by the owner of the film/product, while others are produced by Amazon.com, itself. The DVDs produced by Amazon are made using their Createspace program, in which DVDs are created once ordered using DVD-R technology. The DVDs are then shipped about two days later after being produced. Some DVDs (such as the Jersey Shore Season 1 or The Unusuals Season 1) first release their DVD on Amazon as an Amazon.com Exclusive for a limited time before being released elsewhere.

Website

The domain amazon.com attracted at least 615 million visitors annually by 2008, twice the numbers of walmart.com.[72] Amazon attracts approximately 65 million customers to its U.S. website per month.[73] The company has also invested heavily on a massive amount of server capacity for its website, especially to handle the excessive traffic during the December Christmas holiday season.[74] There are different versions of the website for different countries, such as amazon.co.uk, amazon.fr, amazon.de, amazon.jp, amazon.ca. These sites vary in assortment and prices.

Reviews

Amazon allows users to submit reviews to the web page of each product. Reviewers must rate the product on a rating scale from one to five stars. As with most rating scales, one star stands for the product being abysmal, five stars meaning that the item is stellar. Amazon provides an optional badging option for reviewers which indicate the real name of the reviewer (based on confirmation of a credit card account) or which indicate that the reviewer is one of the top reviewers by popularity. Customers may vote on the reviews, indicating whether or not they found it helpful.

Amazon.com's customer reviews are monitored for indecency, but do permit negative comments. Robert Spector, author of the book amazon.com, describes how "when publishers and authors asked Bezos why amazon.com would publish negative reviews, he defended the practice by claiming that amazon.com was 'taking a different approach...we want to make every book available – the good, the bad, and the ugly...to let truth loose'" (Spector 132). Allegations have been made that Amazon has selectively deleted negative reviews of Scientology related items despite compliance with comments guidelines.[75][76]

Content search

"Search Inside the Book" is a feature which allows customers to search for keywords in the full text of many books in the catalog.[77][78] The feature started with 120,000 titles (or 33 million pages of text) on October 23, 2003.[79] There are currently about 250,000 books in the program. Amazon has cooperated with around 130 publishers to allow users to perform these searches.

To avoid copyright violations, amazon.com does not return the computer-readable text of the book. Instead, it returns a picture of the matching page, disables printing, and puts limits on the number of pages in a book a single user can access. Additionally, customers can purchase online access to some of the same books via the "Amazon Upgrade" program.

Third-party sellers

Amazon derives about 40 percent of its sales from affiliate marketing called "Amazon Associates" and third-party sellers who sell products on Amazon[citation needed]. Associates receive a commission for referring customers to Amazon by placing links on their websites to Amazon, if the referral results in a sale. Worldwide, Amazon has "over 900,000 members" in its affiliate programs.[80] Amazon reported over 1.3 million sellers sold products through Amazon's World Wide Web sites in 2007. Unlike eBay, Amazon sellers do not have to maintain separate payment accounts; all payments are handled by Amazon.

Associates can access the Amazon catalog directly on their websites by using the Amazon Web Services (AWS) XML service. A new affiliate product, aStore, allows Associates to embed a subset of Amazon products within, or linked to another website. In June 2010, Amazon Seller Product Suggestions was launched (rumored to be internally called "Project Genesis") to provide more transparency to sellers by recommending specific products to third party sellers to sell on Amazon. Products suggested are based on customers' browsing history.[81]

A January 2010 survey of third-party sellers by Auctionbytes.com [82] found that Amazon was 4th overall.[83] amazon.com placed second in "Profitability". Its lowest rating, but still above average, was in "Ease of Use". Sellers felt Amazon had clearly defined rules, provided a steady stream of traffic to their listings, and put less emphasis on a community component. amazon.com came in second in the Recommended Selling Venue category.

Controversies

Main article: Amazon.com controversies

Since its founding, in summary, the website Amazon.com has attracted criticism and controversy from multiple sources over its actions, such as its "1-Click patent" claims, anti-competitive actions, price discrimination, anti-unionization efforts, Amazon Kindle remote content removal, and low corporate tax payments. Various decisions over whether to censor or publish content such as the WikiLeaks web site; LGBT book sales rank; and works containing libel, facilitating dogfight, cockfight, or pedophile activities have been controversial.

Sales and use taxes

Amazon is increasingly coming under legal and political pressure from state governments and traditional retailers because of its refusal to collect sales tax, including many states where it maintains warehouse and wholly-owned subsidiaries in states where it has no physical presence.[84] Critics of Amazon argue that its refusal to collect sales taxes has given it an unfair advantage over traditional retailers. While customers are required to remit use tax directly to their state, few customers do so.

California

Rep. Nancy Skinner pushed legislation to tax online sales that was approved in 2009 as part of the state budget. Gov. Arnold Schwarznegger vetoed the legislation.[85] On 19 January 2011 Skinner introduced similar legislation in the form of AB153. The bill requires out-of-state online sellers with affiliates in California to collect sales tax on purchases made by state residents. The affiliate provision was included to ensure that only sellers with a California nexus are taxed, as required by federal law.[86] "This legislation will close the current loophole in tax law which has allowed out-of-state companies to avoid collecting California sales and use tax," stated Skinner.[85] Skinner estimated that AB153 could produce between $250 million and $500 million per year in new revenue. She and other supporters of the bill believe that the election of Jerry Brown to the governorship and support from retailers such as Barnes & Noble will help the measure become law.[87]

In 2011 Amazon threatened to terminate roughly 10,000 of its affiliates located in California if legislation pending in the state legislature to deem such affiliates as constituting a nexus that requires the collection of sales tax is passed. California affiliates would no longer receive commissions on referrals to Amazon.[88]As of March 2011 four bills are pending in the state legislature would define the use of associates located in California for sales referrals as activity subject to taxation by California. In a letter addressed to California's Board of Equalization, the agency responsible for collecting sales taxes, Amazon called such legislation "unconstitutional" and said it would terminate its California affiliates if passed. "If any of these new tax collection schemes were adopted, Amazon would be compelled to end its advertising relationships with well over 10,000 California-based participants in the Amazon 'Associates Program,'" wrote Paul Misener, Amazon's Vice President for Global Public Policy. Responding to Amazon, Nancy Skinner said, "This is really about e-fairness. It's really to be fair and show our California Business that we're not hanging them out to dry."[89]

Missouri

Two legislators in Missouri have proposed joining the Streamlined Sales Tax Project to ensure that the state collects sales tax on goods shipped from online retailers located out-of-state. Currently Missourians are required to remit use tax for purchases made online but the state government has no practical method to force compliance. Legislative staff report that taxing online sales should significantly increase revenue. Rep. Margo McNeil cited a University of Tennessee study saying that Missouri stands to lose $187 million in 2011 by not taxing online sales. McNeil also said the streamlined sales tax is a good way to end the unfair advantages enjoyed by online retailers over traditional businesses. "The tax is a step in trying to even the playing field because right now we have a lot of people who are going in and using the stores as a showroom and then going home and buying on the Internet ...," McNeil said.[90]

New York

In 2008, New York State passed a law that would force online retailers to collect sales taxes on shipments to state residents.[91] Shortly after the law was signed, amazon.com filed a complaint in the New York Supreme Court objecting to the law.[91] The complaint wasn't based on whether in-state customers should pay tax, but upon the long-standing practice of it being the responsibility of the customer to report the sales tax (known as use tax in this case) and not that of the out-of-state businesses.[91] The lawsuit was tossed out of court in January 2009, when New York State Supreme Court Justice Eileen Bransten stated "there is no basis upon which Amazon can prevail."[92]

Texas

In 2010, Texas sent a demand letter for $269 million in sales taxes that the state argues should have been collected and remitted for sales to Texas customers. This dollar amount covers uncollected taxes from December 2005 to December 2009 and also includes penalties and interest. Texas authorities began an investigation of Amazon's tax status after a May 2008 report by The Dallas Morning News questioned why Amazon does not collect sales tax from Texas customers despite maintaining a distribution center in Irving near the Dallas/Fort Worth International Airport. Amazon argues that this distribution center, owned by Amazon.com KYDC LLC, located at the same address as Amazon's corporate headquarters in Seattle, is a legally separate entity and thus does not establish a physical presence in Texas that would require Amazon to collect sales taxes.[93] Amazon has decided to close a distribution center located in Irving in order to avoid future attempts by Texas to force the collection of sales taxes. 119 workers will lose their jobs when the facility closes.[94]

Texas Comptroller Susan Combs faced skeptical questions and criticism from members of the Texas Senate Finance Committee 16 February 2011 over her attempts to collect back sales tax from Amazon.com. Combs replied by saying that all businesses must obey the law "It is our belief that this is a very, very clear issue about nexus. As I say, this started probably because of catalog sales 47 years ago in 1963," said Combs. Combs also cited a Texas law to back up her argument that Amazon is required to collect sales taxes: "A retailer is engaged in business in this state if the retailer: 1.) maintains, occupies, or uses in this state permanently, temporarily, directly, indirectly or through a subsidiary or agent, however named, an office, place of distribution, sales or sample room or place, warehouse, storage place, or any other place of business.”[95] The Dallas Morning News published an editorial supporting Combs' efforts to collect sales tax from Amazon.com on 17 February 2011. The paper wrote, "It defies logic that a book bought online can elude sales tax while the same book bought in a bookstore can’t. A sales transaction is a sales transaction, and if one is taxed, why shouldn’t the other be taxed as well?"[96]

In March 2010 State Rep. Linda Harper-Brown filed House Bill 2719. House Bill 2719 would allow Amazon to avoid Texas sales tax by amending the state tax code to exempt companies or individuals from being classified as retailers or being ordered to provide state agencies with information on purchases made in Texas. if they make use of "only a fulfillment center...or computer server." House Bill 2719 is stands in sharp contrast to House Bill 2403, introduced by Rep. John Otto. House Bill 2403 would close loopholes in the Texas tax code that support Amazon's claim of being exempt from collecting sales tax. [97]

Tennessee

Amazon attempted to avoid being required to collect Tennessee sales tax during negotiations with economic development officials to build two warehouses outside of Chattanooga. Amazon argues that its warehouses are not directly affiliated with the company and thus do not create a nexus that would require the collection of sales taxes. Tennessee revenue officials will not reveal any specific information on a deal with Amazon as they claim doing so would violate state confidentiality laws.[98]

Colorado

In response to HB 10-1193 passed in 2010 Amazon.com terminated its relationship with all affiliates located in Colorado. The bill originally sought to tax sales to Colorado residents by online retailers with Colorado affiliates. The bill was amended to remove all reference to affiliates in order to discourage Amazon from cutting ties with them. The final bill required large online retailers to either remit tax on sales to Colorado residents or provide information on Colorado customers to the state. In spite of this move Amazon still decided to terminate its Colorado affiliates.[99]

Illinois

Illinois has passed legislation to tax online sales made to consumers located in the state. In March of 2011 Gov. Pat Quinn signed the "Main Street Fairness Act," which targets online retailers with Illinois affiliates. Quinn said the act would help create fair competition and generate more revenue for the state. Illinois estimates that it loses $153 million in sales taxes every year due to the fact that out-of-state retailers do not remit sales tax on purchases made by Illinois residents. Some online retailers have responded to this legislation and similar efforts in other states by threatening income tax revenues collected from their online affiliates. Amazon, along with Overstock.com, has threatened to terminate affiliates in states that demand that sales tax be collected by online retailers, including Illinois. Wal-Mart responded by inviting online businesses based in Illinois to join its affiliate network.[100]

Affiliates

Amazon is often able to overcome these threats by cutting ties with local partners or leaving the state in question. Amazon severed its relationships with affiliates in Colorado due to efforts by the state government to collect sales tax on internet purchases. Amazon has threatened similar action against affiliates in Illinois over the same issue.[101]

Kindle content removal

See also: Criticism of Amazon Kindle remote content removal

In July 2009, The New York Times reported that amazon.com deleted all customer copies of certain books published by MobileReference,[102] including the books Nineteen Eighty-Four and Animal Farm from users' Kindles. This action was taken with neither prior notification nor specific permission of individual users. Customers did receive a refund of the purchase price and, later, an offer of an Amazon gift certificate or a check for $30. The ebooks were initially published by MobileReference on Mobipocket for sale in Australia only—due to those works having fallen into public domain in Australia—however, when the ebooks were automatically uploaded to Amazon by MobiPocket, the territory restriction was not honored, and the book was allowed to be sold in territories such as the United States where the copyright term had not expired.

Sale of Wikipedia's material as books

German-speaking press and the blogosphere have criticized Amazon for selling tens of thousands of print on demand books which reproduced Wikipedia articles.[103][104][105][106] These books are produced by an American company named Books LLC and by three Mauritian subsidiaries of the German publisher VDM: Alphascript Publishing, Betascript Publishing and Fastbook Publishing. Amazon did not acknowledge this issue raised on blogs and some customers that have asked the company to withdraw all these titles from its catalog.[104] The collaboration between amazon.com and VDM Publishing was started in 2007.[107]

Pedophile guide

On November 10, 2010, a controversy arose over the sale by Amazon of an e-book by Phillip R. Greaves entitled The Pedophile's Guide to Love and Pleasure: a Child-lover's Code of Conduct.[108]

Readers threatened to boycott Amazon over its selling of the book, which was described by critics as a "pedophile guide". Amazon initially defended the sale of the book, saying that the site "believes it is censorship not to sell certain books simply because we or others believe their message is objectionable"[109] and that the site "supported the right of every individual to make their own purchasing decisions". However, the site later removed the book.[110] The San Francisco Chronicle wrote that Amazon "defended the book, then removed it, then reinstated it, and then removed it again".[109]

Christopher Finan, the president of the American Booksellers Association for Free Expression, argued that Amazon has the right to sell the book as it is not child pornography or legally obscene since it does not have pictures. On the other hand, Enough is Enough, a child safety organization, issued a statement saying that the book should be removed and that it "lends the impression that child abuse is normal".[111] People for the Ethical Treatment of Animals, citing the removal of The Pedophile's Guide from Amazon, urged the website to also remove books on dog fighting from its catalogue.[112]

Greaves was arrested on December 20, 2010 at his Pueblo, CO home on a felony warrant issued by the Polk County Sheriff's Office in Lakeland, FL. Internet Crime Detectives ordered a signed hard copy version of Greaves' book and had it shipped to the agency's jurisdiction. According to Sheriff Grady Judd, upon receipt of the book, Greaves violated local laws prohibiting the distribution of "obscene material depicting minors engaged in harmful conduct," a third degree felony.[113]

WikiLeaks hosting

On December 1, 2010, Amazon stopped hosting the website associated with the whistle-blowing organization WikiLeaks. Amazon did not initially comment on whether it forced the site to leave.[114] The New York Times reported: "Senator Joseph I. Lieberman, independent of Connecticut, said Amazon had stopped hosting the WikiLeaks site on Wednesday after being contacted by the staff of the Homeland Security and Governmental Affairs Committee."[115]

In a later press release issued by Amazon.com, they denied that they had terminated wikileaks.org due to either "a government inquiry" or "massive DDOS attacks". They claimed that it was due to "a violation of [Amazon's] terms of service", because wikileaks.org was "securing and storing large quantities of data that isn't rightfully theirs, and publishing this data without ensuring it won’t injure others" [116]

Amazon's action demonstrated, in the eyes of Wikileaks founder Julian Assange, that Amazon (a USA based company) was in a jurisdiction that "suffered a free speech deficit".[117]

Amazon's action led to a public letter from Daniel Ellsberg, famous for leaking the Pentagon Papers during the Vietnam war. Ellsberg stated that he was "disgusted by Amazon’s cowardice and servility", likening it to "China’s control of information and deterrence of whistle-blowing", and he called for a "broad" and "immediate" boycott of Amazon.[118]

Entrepreneurship by former employees

A number of companies have been started and founded by former Amazon.com employees.[119]

  • BankBazaar.com was founded by Arjun Shetty, a former senior product manager at amazon.com
  • Evri was led by Neil Roseman, a former VP at amazon.com
  • Findory was founded by Greg Linden
  • Foodista was founded by Barnaby Dorfman
  • Hulu is led by Jason Kilar, a former SVP at amazon.com
  • Jambool/SocialGold was co-founded by former amazon.com engineers Vikas Gupta and Reza Hussein
  • Quora was co-founded by ex-amazon.com (and Facebook) engineer Charlie Cheever
  • TeachStreet was founded by Dave Schappell, an early amazon.com product manager
  • TrackSimple was founded by Jon Ingalls and Ajit Banerjee
  • Trusera was founded by Keith Schorsch, an early Amazonian
  • Pelago was co-founded by Jeff Holden, a former SVP at amazon.com and Darren Vengroff, a former Principal Engineer
  • Wikinvest was founded by Michael Shea
  • Flipkart was founded by Sachin Bansal and Binny Bansal, former Amazon India employees.[120]
  • The Book Depository was founded by Andrew Crawford, former Amazon.co.uk employee.

See also

References

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Further reading

Wikimedia Commons has media related to Amazon.com.
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