Amazon
Amazon is the largest company in the world by revenue. Most of its operating profit comes not from selling things to people, but from renting computers to businesses — a service it originally built for itself.
The Plumbing
Every large retailer builds internal infrastructure: servers, storage, systems for handling traffic that spikes at Christmas and sits idle in February.
Almost every one of them treats that as a cost. Amazon looked at its own plumbing and asked what would happen if it sold access to it.
That decision — taking the least glamorous part of the business and turning it into a product — is the single most valuable thing the company has ever done, and it is worth putting at the top rather than the end, because the retail story everyone knows is not where the money is.
Cadabra, 1994
Jeff Bezos founded the company on 5 July 1994 in Bellevue, Washington. He called it Cadabra, Inc., and changed the name to Amazon in November of the same year — the story being that a lawyer had misheard “Cadabra” as “cadaver.”
The website opened on 16 July 1995, selling books.
Books were chosen deliberately and the logic is worth spelling out. There are more titles in print than any physical shop can stock, so a catalogue is a genuine advantage rather than a gimmick. Books do not spoil, do not need sizing, and are identical whoever sells them — which means a customer buying one online risks nothing. It was the ideal first category for a business that had to teach people to type their card number into a website.
Amazon listed in May 1997.
Ninety-Four Per Cent
In December 1999 the share price was about $107. By September 2001 it was about $6.
That is a fall of roughly ninety-four per cent, and at the time it was widely read as a verdict rather than a market. Analysts published notes questioning whether the company could fund itself to the end of the following year. The phrase used in the press was Amazon.bomb.
Nothing about the business had failed. Revenue was still growing. What collapsed was the willingness of the market to pay for growth it could not yet see converted into profit — which is the same thing that had lifted the price to $107 in the first place.
Nine Years to a Profit
2003 was Amazon’s first profitable year. Net profit went from $3 million in the last quarter of 2002 to $73 million in the last quarter of 2003.
Nine years from founding to an annual profit is the fact that most defines the company, and it is the hardest one to copy. Amazon was able to spend a decade building capacity ahead of demand because Bezos held enough control, and made the argument publicly and repeatedly, that cash flow mattered and reported earnings did not.
Plenty of companies have since claimed the same licence. Very few had a founder who wrote it down in a shareholder letter in 1997 and then behaved consistently with it for twenty years.
Prime, and the Habit
Amazon Prime launched in February 2005 at $79 a year for unlimited two-day delivery.
Read as a shipping discount it looks expensive. Read correctly, it is a behavioural product. Once a customer has paid the annual fee, every future purchase feels cheaper than buying the same thing elsewhere, because the delivery has already been paid for. The subscription converts a shopper who compares prices into one who checks Amazon first.
The Marketplace and Fulfilment by Amazon programme, expanded from 2006, did something similar to sellers: let other merchants list on Amazon, store their goods in Amazon’s warehouses, and use its delivery. Amazon takes a cut of a sale it did not have to buy inventory for — and learns exactly what is selling.
Selling the Thing That Kills Your Business
The Kindle launched in November 2007 at $399 and was described at the time as the iPod of reading.
The interesting part is the conflict. Amazon’s original business was shipping physical books. The Kindle’s purpose was to stop people buying them.
Most companies cannot do this. The division that would be damaged argues, correctly, that the new product cannibalises the old one, and the argument usually wins. Amazon built the device that undermined its founding category, and the reasoning it gave was simple: somebody was going to, and it had better be them.
The Accident That Became the Engine
Amazon Web Services began in 2002, with S3 storage arriving in 2006 and EC2 compute in 2008.
It came out of an internal problem. Amazon’s own teams were slow to ship because each of them kept rebuilding the same underlying infrastructure. The fix was to make that infrastructure a set of clean services any team could call. Having built it, the company noticed that every other business on the internet had the same problem.
By early 2023 AWS held about 31 per cent of the cloud market. More importantly, it generates the large majority of Amazon’s operating profit — which is why a retailer running on thin margins can go on investing at the scale it does.
The pattern is the same one that produced Prime and the Marketplace: take something built for internal reasons, and let outsiders pay to use it.
Elsewhere the company has bought rather than built — Audible in March 2008 for around $300 million, Twitch in August 2014 for $970 million, Ring in 2018 for about $1 billion, and Whole Foods Market on 28 August 2017 for $13.7 billion, which put it into physical grocery overnight.
What It Costs
A profile of Amazon that stopped at the business model would be dishonest. The company is the subject of sustained, documented criticism, and it belongs here.
Warehouse conditions. Injury rates at fulfilment centres, productivity quotas measured to the second, and the physical toll of the work have been the subject of regulatory attention and reporting in several countries.
Unions. Amazon has opposed unionisation persistently and at scale, in a workforce of more than one and a half million people.
The marketplace conflict. Amazon competes with the sellers it hosts, while holding data on how their products perform. Regulators in the United States and Europe have examined whether that position is used against them.
The wider list. Surveillance partnerships, environmental impact, and the terms imposed on small suppliers.
None of these are settled matters, and this profile does not settle them. They are recorded because a company of this size cannot be described honestly by its revenue alone.
Where It Stands
Jeff Bezos stepped down as chief executive on 5 July 2021 — the company’s twenty-seventh birthday — and became executive chairman. Andy Jassy, who had built AWS, replaced him.
Revenue for 2025 was $716.9 billion with net income of $77.67 billion, from about 1,576,000 employees across Seattle and Arlington County, Virginia. By 2026 it is the largest company in the world by revenue.
In January 2026 Amazon announced 16,000 corporate job cuts, and was reported to be in talks over a potential $50 billion investment involving OpenAI. In March 2026 it pledged to fund new electricity generation for its data centres — an admission of the scale at which AI infrastructure now consumes power.
Thirty-two years after a man drove west to sell books out of a garage, the shape of the thing is clear enough: Amazon is not a shop that also does computing. It is an infrastructure company that also runs the largest shop in the world.
Common Questions
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How This Was Written
Figures are as at the date of publication.
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