Amazon on the Brink of bankruptcy

Topics: Jeff Bezos, Electronic commerce, Online shopping / Pages: 3 (924 words) / Published: Jul 27th, 2014
Amazon is a Fortune 500 American e-commerce company created by Jeff Bezos. CEO Jeff Bezos was an investment banker with no previous experience in the book publishing or retail industries. Amazon began in 1994 as an online bookstore, which gave it the advantage of having more titles than the traditional brick-and-mortar stores. From its book selling roots, Amazon has branched into clothing, gourmet food, watches, jewelry, baby products and apparel, beauty products, sporting goods, music CD’s, DVD’s, video tapes, home appliances and electronics and so much more.
By September 1995, the company was selling over $20,000 per week out of Bezos’s garage. During this rapid growth period, focus on enhancing its product and service offerings and capabilities with increasingly sophisticated browsing and focused search capabilities, personalized store layout and recommendations, shopping carts, 1-click shopping (which was later patented), wish lists and greeting cards. By 1997, revenues for just the first quarter had increased to $16 million, which was the same amount as the entire previous year. The company went public on May 15, 1997.
Near Death
Like most internet businesses, had yet to achieve profitability. Despite the company’s popularity, in January 2001, Bezos, was under tremendous pressure to generate profits. Bezos believed that the key challenge to the company in late 2000 was to achieve profitability by year-end 2001. Some analysts begun to question whether executives would be able to achieve profitability before money ran out. While its books, music and video stores were breaking even, its toy, home and garden, electronics, and international stores continued to burn cash. The dot-com stock market crash exacerbated the company’s problems and, by mid-2000, many of its online retail partners had declared bankruptcy.
Business Model Change
One of the biggest pros to Amazon's diversifications strategy is

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