To explain the present and divine the future, Amazon’s founder and prognosticator-in-chief, Jeff Bezos, often turns to the past. Fond of historical analogies, Bezos has compared the dotcom boom and bust to the 1849 gold rush, the advent of electricity to today’s broadband-infused Web, the printed book to a horse, and the Kindle reader to a car. Perhaps his trippiest simile likens the impact of the Internet on business to the Cambrian period approximately 550 million years ago, after the first multicellular creatures crawled out of the primordial ooze. That’s when we experienced an evolutionary big bang, which engendered both the greatest rate of speciation the world has ever seen and its greatest rate of extinction. “What’s very dangerous,” Bezos summed up, “is not to evolve.”
Evolution is not merely a theory for Amazon; it’s part of its intelligent design. Originating as a single-cell online bookseller in July 1995, Amazon has, over its 14-year history, developed into a monstrous cybermall, offering millions of products and accumulating a market capitalization north of $34 billion. It peddles everything from music, movies, and video games to apparel, gadgets, gardening tools, lab equipment, health and beauty aids, even sex toys and the bonglike “mini hookah.” Along the way, Amazon incorporated unvarnished user feedback into product pages, instituted a “look inside” function so readers can sample books, and launched Marketplace, which allows third-party sellers to list new and used products next to Amazon’s.
Nothing, however, has piqued the public imagination quite like the Kindle, Amazon’s e-book reader, now in its second iteration. While not the first gadget to offer an entire library in the palm of your hand or to deploy e-ink in mimicking the look of a printed page, the Kindle is the first literary hit of its kind, selling hundreds of thousands of units since its introduction in November 2007. It’s also the first with built-in wireless 3G connectivity, making it possible to download whole volumes in less than a minute — more than 1,500 books can fit on a single machine — with titles costing usually less than half the price of a conventional hardcover. To further its e-reach, Amazon has announced a larger, more expensive Kindle DX for textbooks and periodicals, which it will test-market to college students.
Recently, Bezos claimed that Kindle e-books add 35% to a physical book’s sales on Amazon whenever Kindle editions are available. Put another way, for every three print copies of, say, Malcolm Gladwell’s The Outliers the site sells, it also sells one Kindle e-book — or about 25% of total sales. Citigroup analyst Mark Mahaney estimates that Amazon sold a half-million Kindles last year and projects its total e-book revenue, which includes sales of books and devices, to reach $1.2 billion by 2010. The company reports that 275,000 titles are available in the Kindle format, including nearly all 112 books on The New York Times best-seller list. Amazon, for its part, makes no pretense of its plans. On its Kindle page, it states, “Our vision is to have every book ever printed, in any language, all available in under 60 seconds.”
