Amazon.com 2000 Annual Report Download - page 13

Download and view the complete annual report

Please find page 13 of the 2000 Amazon.com annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 76

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76

Competition
The online commerce market segments are relatively new, rapidly evolving and intensely competitive. In
addition, the retail environment for our products are generally intensely competitive. Our current or potential
competitors include (1) publishers, distributors, manufacturers and physical-world retailers of our products,
many of which possess significant brand awareness, sales volume and customer bases, and some of which
currently sell, or may sell, products or services through the Internet, mail order or direct marketing, (2) online
vendors of products that we sell, (3) a number of indirect competitors, including Web portals and Web search
engines, that are involved in online commerce, either directly or in collaboration with other retailers, and
(4) Web-based retailers using alternative fulfillment capabilities. We believe that the principal competitive
factors in our market segments include brand recognition, selection, personalized services, convenience, price,
accessibility, customer service, quality of search tools, quality of editorial and other Web site content,
reliability, speed of fulfillment, ease of use and our ability to adapt to changing conditions. As the online
commerce market segments continue to grow, other companies may also enter into business combinations or
alliances that strengthen their competitive positions.
Intellectual Property
We regard our trademarks, service marks, copyrights, patents, trade dress, trade secrets, proprietary
technology and similar intellectual property as critical to our success, and we rely on trademark, copyright and
patent law, trade secret protection and confidentiality and/or license agreements with our employees, customers,
partners and others to protect our proprietary rights. We have been issued a number of trademarks,
servicemarks, patents and copyrights by U.S. and foreign governmental authorities. We also have applied for
the registration of other trademarks, service marks and copyrights in the U.S. and internationally, and we have
filed U.S. and international patent applications covering certain of our proprietary technology. Effective
trademark, service mark, copyright, patent and trade secret protection may not be available in every country in
which our products and services are made available online. We have licensed in the past, and expect that we
may license in the future, certain of our proprietary rights, such as trademarks, patents, technologies or
copyrighted materials, to third parties.
Employees
As of December 31, 2000, we employed approximately 9,000 full-time and part-time employees. We also
employ independent contractors and temporary personnel on a seasonal basis. None of our employees are
represented by a labor union and we consider our employee relations to be good. Competition for qualified
personnel in our industry is intense, particularly for software development and other technical staff. We believe
that our future success will depend in part on our continued ability to attract, hire and retain qualified
personnel.
Additional Factors That May Affect Future Results
The following risk factors and other information included in this Annual Report should be carefully
considered. The risks and uncertainties described below are not the only ones we face. Additional risks and
uncertainties not presently known to us or that we currently deem immaterial also may impair our business
operations. If any of the following risks occur, our business, financial condition, operating results and cash
flows could be materially adversely affected.
We Have an Accumulated Deficit and Anticipate Further Losses
We have incurred significant losses since we began doing business. As of December 31, 2000, we had an
accumulated deficit of $2.3 billion and our stockholders’ equity was a deficit of $967 million. While we
generated pro forma operating segment profit in our U.S. Books, Music and DVD/video segment for the full
year 2000 and have projected pro forma operating profit for the Company as a whole for the fourth quarter of
2001, we are incurring substantial operating losses and may continue to incur such losses for the foreseeable
5