Amazon.Com Evolution

Amazon.com Evolution

Amazon has emerged as the goliath of online retailing. It has accomplished this by clever marketing tactics and savvy information technology choices. Amazon started out as online bookseller and is arguably the company that is most closely tied with the dot.com gold rush which began in the mid 1990’s. It has grown at a tremendous rate with revenues rising from about $150 million in 1997 to $3.1 billion in 2001. The company made its first quarterly profit of $5.8 million in the fourth quarter of 2001. In addition to their thriving online retail sales, they have moved in other strategic directions and have entered into the same arena as other dot.com giants such as Microsoft and Google.

Amazon has not moved away from its core competency as an online retailer. They have dominated as the number one in media and merchandising with their B2C platform. The company has branched out and set its site on some other major players in the industry. They have designed a new payment service for online vendors. The Amazon Flexible Payments Service allows developers to process payments on their own websites, which can be easily scaled up or down to handle whatever traffic volume is needed. This innovative system will compete with other similar services such as Authorize.net, PayPal, and Google Checkout.

Amazon spent over $2 billion building the infrastructure of its online store, which is among the biggest and most reliable in the world. They only use about 10 percent of their processing capacity so they decided to provide additional service to other companies. A few of the B2B services are the Simple Storage Service (S3), the Elastic Compute Cloud (EC2) and the Mechanical Turk.

With S3, Amazon charges 15 cents per gigabyte per month for businesses to store data and applications on Amazon disk drives. Through EC2, Amazon rents out processing power, starting at 10 cents per hour for equivalent of one basic server. The Mechanical Turk...