The Trouble With Amazon
Colin Robinson
This article appeared in the August 2/9, 2010 edition of The Nation.

Jeff Bezos loves numbers. In a speech in May to graduates at his alma mater, Princeton University, he recounted a childhood memory: when, driving with his grandmother, a heavy smoker, he calculated by how many years her addiction would reduce her life expectancy. Announcing the result from the back seat, he expected praise for his deft math. But his grandmother just burst into tears.

The Amazon founder's geeky obsession with numbers evidently formed early, and despite the glimmer of discomfort revealed by his Princeton anecdote, his fervently quantitative take on the world clearly still predominates. In a letter accompanying the 2009 Amazon annual report, for instance, he sets out a mind-boggling 452 goals for the company in the coming year. The word "revenue" is mentioned only eight times, yet revenue growth is central to the Amazon story. Expanding both internationally and across other products—nonbook sales represent 75 percent of total Amazon turnover—Amazon's global business has increased fifteenfold over the past decade, 28 percent last year alone. Sales in 2009 topped $24.5 billion. To put that in perspective, in 2008 total sales by all US bookstores were less than $17 billion. Amazon is today, by some margin, the largest bookseller in the world.

Of all the goals in the report, Bezos proudly points out, no fewer than 360 deal directly with customer needs. The customer has always been king in the Bezos ethos, and the formula for keeping the king happy is straightforward. "Amazon gives the customers what they want: low prices, vast selection and extreme convenience," he told a shareholders' meeting. On these terms, Amazon's success is stellar. It has more than 2 million titles on sale; bestselling books are routinely discounted by 50 percent or more; and it ranked first in BusinessWeek's "customer service champs" awards last year. But dig beneath the surface of the numbers and a more complex picture emerges, one suggesting that, stats notwithstanding, readers and writers may ultimately not be best served by Amazon's race to become the biggest, cheapest and most convenient bookseller around.
Full lengthy piece at The Nation online.

Footnote (from Shelf Awareness):
In honor of Amazon.com's 15th anniversary, Time offered "A Brief History of Online Shopping." The story noted that one of the first online purchases took place in 1994, a year before Amazon started, when Pizza Hut fulfilled an order made online for a pepperoni pizza with mushrooms and extra cheese--an item not yet available on Amazon.
Illustration at top of post - front page Amazon website - Adrian Brown / Bloomberg News / Getty Images

Read more: http://www.time.com/time/business/article/0,8599,2004089,00.html#ixzz0u9iReJp1