For much of its six-year history, the rallying cry at Amazon.com had been “get big fast.” The
company spent many millions of dollars to acquire and service customers. The strategy worked
the company got big fast. Amazon mostly sold books, CDs, and DVDs; but it also offered
barbecues, big screen TVs, and many things in between. In 2000, a mere five years after it
opened for business, Amazon served 20 million customers, up from 14 million in 1999 (see
Exhibit 1), and sales grew from $1.64 billion in 1999 to $2.76 billion in 2000. However,
Amazon lost $720 million in 1999 and $1.4 billion in 2000 fueling its phenomenal growth (see
Exhibit 2 for selected Amazon financial data).