WhileweexplorelongertermsolutionswearealsocommittedtohelpingsupportemployeesnowWeincreasedourminimumwagethroughtheendofAprilby2perhourintheUS2perhourinCanada ID: 828779
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1 Toourshareowners:Onethingwevelearnedfro
Toourshareowners:OnethingwevelearnedfromtheCOVID-19crisisishowimportantAmazonhasbecometoourcustomers.Wewantyoutoknowwetakethisresponsibilityseriously,andwereproudoftheworkourteamsaredoingtohelpcustomersthroughthisdifficulttime.Amazoniansareworkingaroundtheclocktogetnecessarysuppliesdelivereddirectlytothedoorstepsofpeoplewhoneedthem.Thedemandweareseeingforessentialproductshasbeenandremainshigh.Butunlikea Whileweexplorelonger-termsolutions,wearealsocommittedtohelpingsupportemployeesnow.WeincreasedourminimumwagethroughtheendofAprilby$2perhourintheU.S.,$2perhourinCanada,£2perhourintheUK,and2perhourinmanyEuropeancountries.Andwearepayingassociatesdoubleourregularrateforanyovertimeworkedaminimumof$34anhouranincreasefromtimeandahalf.Thesewageincreaseswillcostmorethan$500million,justthroughtheendofApril,andlikelymorethanthatovertime.Whilewerecognizethisisexpensive,webelieveitstherightthingtodounderthecircumstances.WealsoestablishedtheAmazonReliefFundwithaninitial$25millioninfundingtosupportourindependentdeliveryservicepartnersandtheirdrivers,AmazonFlexparticipants,andtemporaryemployeesunderfinancialdistress.InMarch,weopened100,000newpositionsacrossourfulfillmentanddeliverynetwork.Earlierthisweek,aftersuccessfullyfillingthoseroles,weannouncedwewerecreatinganother75,000jobstorespondtocustomerdemand.Thesenewhiresarehelpingcustomerswhodependonustomeettheircriticalneeds.Weknowthatmanypeoplearoundtheworldhavesufferedfinanciallyasjobsarelostorfurloughed.Wearehappytohavethemonourteamsuntilthingsreturntonormalandeithertheirformeremployercanbringthembackornewjobsbecomeavailable.WevewelcomedJoeDuffy,whojoinedafterlosinghisjobasamechanicatNewarkairportandlearnedaboutanopeningfromafriendwhoisanAmazonoperationsanalyst.DallaspreschoolteacherDarbyGriffinjoinedafterherschoolclosedonMarch9andnowhelpsmanagenewinventory.WerehappytohaveDarbywithusuntilshecanreturntotheclassroom.Amazonisactingaggressivelytoprotectourcustomersfrombadactorslookingtoexploitthecrisis.WeveremovedoverhalfamillionoffersfromourstoresduetoCOVID-basedpricegouging,andwevesuspendedmorethan6,000sellingaccountsgloballyforviolatingourfair-pricingpolicies.AmazonturnedoverinformationaboutsellerswesuspectengagedinpricegougingofproductsrelatedtoCOVID-19to42stateattorneysgeneraloffices.Toaccelerateourresponsetoprice-gougingincidents,wecreatedaspecialcommunicationchannelforstateattorneysgeneraltoquicklyandeasilyescalateconsumercomplaintstous.AmazonWebServicesisalsoplayinganimportantroleinthiscrisis.Theabilityfororganizationstoaccessscalable,dependable,andhighlysecurecomputingpowerwhetherforvitalhealthcarework,tohelpstudentscontinuelearning,ortokeepunprecedentednumbersofemployeesonlineandproductivefromhomeiscriticalinthissituation.Hospitalnetworks,pharmaceuticalcompanies,andresearchlabsareusingAWStoc
2 areforpatients,exploretreatments,andmiti
areforpatients,exploretreatments,andmitigatetheimpactsofCOVID-19inmanyotherways.Academicinstitutionsaroundtheworldaretransitioningfromin-persontovirtualclassroomsandarerunningonAWStohelpensurecontinuityoflearning.AndgovernmentsareleveragingAWSasasecureplatformtobuildoutnewcapabilitiesintheireffortstoendthispandemic.WearecollaboratingwiththeWorldHealthOrganization,supplyingadvancedcloudtechnologiesandtechnicalexpertisetotrackthevirus,understandtheoutbreak,andbettercontainitsspread.WHOisleveragingourcloudtobuildlarge-scaledatalakes,aggregateepidemiologicalcountrydata,rapidlytranslatemedicaltrainingvideosintodifferentlanguages,andhelpglobalhealthcareworkersbettertreatpatients.WeareseparatelymakingapublicAWSCOVID-19datalakeavailableasacentralizedrepositoryforup-to-dateandcuratedinformationrelatedtothespreadandcharacteristicsofthevirusanditsassociatedillnesssoexpertscanaccessandanalyzethelatestdataintheirbattleagainstthedisease.WealsolaunchedtheAWSDiagnosticDevelopmentInitiative,aprogramtosupportcustomersworkingtobringmoreaccuratediagnosticsolutionstomarketforCOVID-19.Betterdiagnosticshelpacceleratetreatmentandcontainmentofthispandemic.Wecommitted$20milliontoacceleratethisworkandhelpourcustomersharnessthecloudtotacklethischallenge.WhiletheprogramwasestablishedinresponsetoCOVID-19,wealsoarelookingtowardthefuture,andwewillfunddiagnosticresearchprojectsthathavethepotentialtobluntfutureinfectiousdiseaseoutbreaks. CustomersaroundtheworldhaveleveragedthecloudtoscaleupservicesandstandupresponsestoCOVID-19.WejoinedtheNewYorkCityCOVID-19RapidResponseCoalitiontodevelopaconversationalagenttoenableat-riskandelderlyNewYorkerstoreceiveaccurate,timelyinformationaboutmedicalandotherimportantneeds.InresponsetoarequestfromtheLosAngelesUnifiedSchoolDistricttotransition700,000studentstoremotelearning,AWShelpedestablishacallcentertofieldITquestions,provideremotesupport,andenablestafftoanswercalls.WeareprovidingcloudservicestotheCDCtohelpthousandsofpublichealthpractitionersandcliniciansgatherdatarelatedtoCOVID-19andinformresponseefforts.IntheUK,AWSprovidesthecloudcomputinginfrastructureforaprojectthatanalyzeshospitaloccupancylevels,emergencyroomcapacity,andpatientwaittimestohelpthecountrysNationalHealthServicedecidewherebesttoallocateresources.InCanada,OTNoneoftheworldslargestvirtualcarenetworksisscalingitsAWS-poweredvideoservicetoaccommodatea4,000%spikeindemandtosupportcitizensasthepandemiccontinues.InBrazil,AWSwillprovidetheSãoPauloStateGovernmentwithcloudcomputinginfrastructuretoguaranteeonlineclassesto1millionstudentsinpublicschoolsacrossthestate.FollowingCDCguidance,ourAlexahealthteambuiltanexperiencethatletsU.S.customerschecktheirrisklevelforCOVID-19athome.Customerscanask,Alexa,whatdoIdoifIthinkIhaveCOVID-19?orAlexa,whatdoIdoifIthinkIhavecoronavirus?Alexath
3 enasksaseriesofquestionsaboutthepersons
enasksaseriesofquestionsaboutthepersonssymptomsandpossibleexposure.Basedonthoseresponses,AlexathenprovidesCDC-sourcedguidance.WecreatedasimilarserviceinJapan,basedonguidancefromtheJapaneseMinistryofHealth,Labor,andWelfare.WeremakingiteasyforcustomerstouseAmazon.comorAlexatodonatedirectlytocharitiesonthefrontlinesoftheCOVID-19crisis,includingFeedingAmerica,theAmericanRedCross,andSavetheChildren.Echousershavetheoptiontosay,Alexa,makeadonationtoFeedingAmericaCOVID-19ResponseFund.InSeattle,wevepartneredwithacateringbusinesstodistribute73,000mealsto2,700elderlyandmedicallyvulnerableresidentsinSeattleandKingCountyduringtheoutbreak,andwedonated8,200laptopstohelpSeattlePublicSchoolsstudentsgainaccesstoadevicewhileclassesareconductedvirtually.BeyondCOVIDAlthoughtheseareincrediblydifficulttimes,theyareanimportantreminderthatwhatwedoasacompanycanmakeabigdifferenceinpeopleslives.Customerscountonustobethere,andwearefortunatetobeabletohelp.Withourscaleandabilitytoinnovatequickly,Amazoncanmakeapositiveimpactandbeanorganizingforceforprogress.Lastyear,weco-foundedTheClimatePledgewithChristianaFigueres,theUNsformerclimatechangechiefandfounderofGlobalOptimism,andbecamethefirstsignatorytothepledge.ThepledgecommitsAmazontomeetthegoalsoftheParisAgreement10yearsearlyandbenetzerocarbonby2040.Amazonfacessignificantchallengesinachievingthisgoalbecausewedontjustmoveinformationaroundwehaveextensivephysicalinfrastructureanddelivermorethan10billionitemsworldwideayear.AndwebelieveifAmazoncangettonetzerocarbontenyearsearly,anycompanycanandwewanttoworktogetherwithallcompaniestomakeitaTothatend,wearerecruitingothercompaniestosignTheClimatePledge.Signatoriesagreetomeasureandreportgreenhousegasemissionsregularly,implementdecarbonizationstrategiesinlinewiththeParisAgreement,andachievenetzeroannualcarbonemissionsby2040.(Wellbeannouncingnewsignatoriessoon.)Weplantomeetthepledge,inpart,bypurchasing100,000electricdeliveryvansfromRivianaMichigan-basedproducerofelectricvehicles.Amazonaimstohave10,000ofRiviansnewelectricvansontheroadasearlyas2022,andall100,000vehiclesontheroadby2030.Thatsgoodfortheenvironment,butthepromiseisevengreater.Thistypeofinvestmentsendsasignaltothemarketplacetostartinventinganddevelopingnewtechnologiesthatlarge,globalcompaniesneedtotransitiontoalow-carboneconomy. Wevealsocommittedtoreaching80%renewableenergyby2024and100%renewableenergyby2030.(Theteamisactuallypushingtogetto100%by2025andhasachallengingbutcredibleplantopullthatoff.)Globally,Amazonhas86solarandwindprojectsthathavethecapacitytogenerateover2,300MWanddelivermorethan6.3millionMWhofenergyannuallyenoughtopowermorethan580,000U.S.homes.Wevemadetremendousprogresscuttingpackagingwaste.Morethanadecadeago,wecreatedtheFrustration-FreePackagingprogramtoencouragemanufacturerstopackagetheirproduct
4 sineasy-to-open,100%recyclablepackagingt
sineasy-to-open,100%recyclablepackagingthatisreadytoshiptocustomerswithouttheneedforanadditionalshippingbox.Since2008,thisprogramhassavedmorethan810,000tonsofpackagingmaterialandeliminatedtheuseof1.4billionshippingWearemakingthesesignificantinvestmentstodriveourcarbonfootprinttozerodespitethefactthatshoppingonlineisalreadyinherentlymorecarbonefficientthangoingtothestore.Amazonssustainabilityscientistshavespentmorethanthreeyearsdevelopingthemodels,tools,andmetricstomeasureourcarbonfootprint.Theirdetailedanalysishasfoundthatshoppingonlineconsistentlygenerateslesscarbonthandrivingtoastore,sinceasingledeliveryvantripcantakeapproximately100roundtripcarjourneysofftheroadonaverage.OurscientistsdevelopedamodeltocomparethecarbonintensityoforderingWholeFoodsMarketgroceriesonlineversusdrivingtoyournearestWholeFoodsMarketstore.Thestudyfoundthat,averagedacrossallbasketsizes,onlinegrocerydeliveriesgenerate43%lowercarbonemissionsperitemcomparedtoshoppinginstores.Smallerbasketsizesgenerateevengreatercarbonsavings.AWSisalsoinherentlymoreefficientthanthetraditionalin-housedatacenter.Thatsprimarilyduetotwothingshigherutilization,andthefactthatourserversandfacilitiesaremoreefficientthanwhatmostcompaniescanachieverunningtheirowndatacenters.Typicalsingle-companydatacentersoperateatroughly18%serverutilization.Theyneedthatexcesscapacitytohandlelargeusagespikes.AWSbenefitsfrommulti-tenantusagepatternsandoperatesatfarhigherserverutilizationrates.Inaddition,AWShasbeensuccessfulinincreasingtheenergyefficiencyofitsfacilitiesandequipment,forinstancebyusingmoreefficientevaporativecoolingincertaindatacentersinsteadoftraditionalairconditioning.Astudyby451ResearchfoundthatAWSsinfrastructureis3.6timesmoreenergyefficientthanthemedianU.S.enterprisedatacentersurveyed.Alongwithouruseofrenewableenergy,thesefactorsenableAWStodothesametasksastraditionaldatacenterswithan88%lowercarbonfootprint.Anddontthinkwerenotgoingtogetthoselast12pointswellmakeAWS100%carbonfreethroughmoreinvestmentsinrenewableenergyprojects.LeveragingscaleforgoodOverthelastdecade,nocompanyhascreatedmorejobsthanAmazon.Amazondirectlyemploys840,000workersworldwide,includingover590,000intheU.S.,115,000inEurope,and95,000inAsia.Intotal,Amazondirectlyandindirectlysupports2millionjobsintheU.S.,including680,000-plusjobscreatedbyAmazonsinvestmentsinareaslikeconstruction,logistics,andprofessionalservices,plusanother830,000jobscreatedbysmallandmedium-sizedbusinessessellingonAmazon.Globally,wesupportnearly4millionjobs.Weareespeciallyproudofthefactthatmanyoftheseareentry-leveljobsthatgivepeopletheirfirstopportunitytoparticipateintheworkforce.AndAmazonsjobscomewithanindustry-leading$15minimumwageandcomprehensivebenefits.Morethan40millionAmericansmanymakingthefederalminimumwageof$7.25anhourearnlessthanthelowest-paidAmazo
5 nassociate.Whenweraisedourstartingminimu
nassociate.Whenweraisedourstartingminimumwageto$15anhourin2018,ithadanimmediateandmeaningfulimpactonthehundredsofthousandsofpeopleworkinginourfulfillmentcenters.Wewantotherbigemployerstojoinusbyraisingtheirownminimumpayrates,andwecontinuetolobbyfora$15federalminimumwage. Wewanttoimproveworkerslivesbeyondpay.Amazonprovideseveryfull-timeemployeewithhealthinsurance,a401(k)plan,20weekspaidmaternityleave,andotherbenefits.ThesearethesamebenefitsthatAmazonsmostseniorexecutivesreceive.Andwithourrapidlychangingeconomy,weseemoreclearlythanevertheneedforworkerstoevolvetheirskillscontinuallytokeepupwithtechnology.Thatswhywerespending$700milliontoprovidemorethan100,000Amazoniansaccesstotrainingprograms,attheirplacesofwork,inhigh-demandfieldssuchashealthcare,cloudcomputing,andmachinelearning.Since2012,wehaveofferedCareerChoice,apre-paidtuitionprogramforfulfillmentcenterassociateslookingtomoveintohigh-demandoccupations.Amazonpaysupto95%oftuitionandfeestowardacertificateordiplomainqualifiedfieldsofstudy,leadingtoenhancedemploymentopportunitiesinhigh-demandjobs.Sinceitslaunch,morethan25,000Amazonianshavereceivedtrainingforin-demandoccupations.Toensurethatfuturegenerationshavetheskillstheyneedtothriveinatechnology-driveneconomy,westartedaprogramlastyearcalledAmazonFutureEngineer,whichisdesignedtoeducateandtrainlow-incomeanddisadvantagedyoungpeopletopursuecareersincomputerscience.Wehaveanambitiousgoal:tohelphundredsofthousandsofstudentseachyearlearncomputerscienceandcoding.AmazonFutureEngineercurrentlyfundsIntroductiontoComputerScienceandAPComputerScienceclassesformorethan2,000schoolsinunderservedcommunitiesacrossthecountry.Eachyear,AmazonFutureEngineeralsogives100four-year,$40,000collegescholarshipstocomputersciencestudentsfromlow-incomebackgrounds.Thosescholarshiprecipientsalsoreceiveguaranteed,paidinternshipsatAmazonaftertheirfirstyearofcollege.OurprogramintheUKfunds120engineeringapprenticeshipsandhelpsstudentsfromdisadvantagedbackgroundspursuetechnologycareers.Fornow,myowntimeandthinkingcontinuestobefocusedonCOVID-19andhowAmazoncanhelpwhilewereinthemiddleofit.IamextremelygratefultomyfellowAmazoniansforallthegritandingenuitytheyareshowingaswemovethroughthis.Youcancountonallofustolookbeyondtheimmediatecrisisforinsightsandlessonsandhowtoapplythemgoingforward.ReflectonthisfromTheodorSeussGeisel:Whensomethingbadhappensyouhavethreechoices.Youcaneitherletitdefineyou,letitdestroyyou,oryoucanletitstrengthenyou.Iamveryoptimisticaboutwhichofthesecivilizationisgoingtochoose.Eveninthesecircumstances,itremainsDay1.Asalways,Iattachacopyofouroriginal1997letter. JeffreyP.BezosFounderandChiefExecutiveOfficerAmazon.com,Inc. 1997LETTERTOSHAREHOLDERS(Reprintedfromthe1997AnnualReport)Toourshareholders:Amazon.compassedmanymilestonesin1997:byyear-end,wehadservedmorethan1.5mil
6 lioncustomers,yielding838%revenuegrowtht
lioncustomers,yielding838%revenuegrowthto$147.8million,andextendedourmarketleadershipdespiteaggressivecompetitiveentry.ButthisisDay1fortheInternetand,ifweexecutewell,forAmazon.com.Today,onlinecommercesavescustomersmoneyandprecioustime.Tomorrow,throughpersonalization,onlinecommercewillacceleratetheveryprocessofdiscovery.Amazon.comusestheInternettocreaterealvalueforitscustomersand,bydoingso,hopestocreateanenduringfranchise,eveninestablishedandlargemarkets.Wehaveawindowofopportunityaslargerplayersmarshaltheresourcestopursuetheonlineopportunityandascustomers,newtopurchasingonline,arereceptivetoformingnewrelationships.Thecompetitivelandscapehascontinuedtoevolveatafastpace.Manylargeplayershavemovedonlinewithcredibleofferingsandhavedevotedsubstantialenergyandresourcestobuildingawareness,traffic,andsales.Ourgoalistomovequicklytosolidifyandextendourcurrentpositionwhilewebegintopursuetheonlinecommerceopportunitiesinotherareas.Weseesubstantialopportunityinthelargemarketswearetargeting.Thisstrategyisnotwithoutrisk:itrequiresseriousinvestmentandcrispexecutionagainstestablishedfranchiseleaders.ItsAllAbouttheLongTermWebelievethatafundamentalmeasureofoursuccesswillbetheshareholdervaluewecreateoverthe.Thisvaluewillbeadirectresultofourabilitytoextendandsolidifyourcurrentmarketleadershipposition.Thestrongerourmarketleadership,themorepowerfuloureconomicmodel.Marketleadershipcantranslatedirectlytohigherrevenue,higherprofitability,greatercapitalvelocity,andcorrespondinglystrongerreturnsoninvestedcapital.Ourdecisionshaveconsistentlyreflectedthisfocus.Wefirstmeasureourselvesintermsofthemetricsmostindicativeofourmarketleadership:customerandrevenuegrowth,thedegreetowhichourcustomerscontinuetopurchasefromusonarepeatbasis,andthestrengthofourbrand.Wehaveinvestedandwillcontinuetoinvestaggressivelytoexpandandleverageourcustomerbase,brand,andinfrastructureaswemovetoestablishanenduringfranchise.Becauseofouremphasisonthelongterm,wemaymakedecisionsandweightradeoffsdifferentlythansomecompanies.Accordingly,wewanttosharewithyouourfundamentalmanagementanddecision-makingapproachsothatyou,ourshareholders,mayconfirmthatitisconsistentwithyourinvestmentphilosophy:Wewillcontinuetofocusrelentlesslyonourcustomers.Wewillcontinuetomakeinvestmentdecisionsinlightoflong-termmarketleadershipconsiderationsratherthanshort-termprofitabilityconsiderationsorshort-termWallStreetreactions.Wewillcontinuetomeasureourprogramsandtheeffectivenessofourinvestmentsanalytically,tojettisonthosethatdonotprovideacceptablereturns,andtostepupourinvestmentinthosethatworkbest.Wewillcontinuetolearnfrombothoursuccessesandourfailures. Wewillmakeboldratherthantimidinvestmentdecisionswhereweseeasufficientprobabilityofgainingmarketleadershipadvantages.Someoftheseinvestmentswillpayoff,otherswillnot,andwewillhavelearnedan
7 othervaluablelessonineithercase.Whenfor
othervaluablelessonineithercase.WhenforcedtochoosebetweenoptimizingtheappearanceofourGAAPaccountingandmaximizingthepresentvalueoffuturecashflows,welltakethecashflows.Wewillshareourstrategicthoughtprocesseswithyouwhenwemakeboldchoices(totheextentcompetitivepressuresallow),sothatyoumayevaluateforyourselveswhetherwearemakingrationallong-termleadershipinvestments.Wewillworkhardtospendwiselyandmaintainourleanculture.Weunderstandtheimportanceofcontinuallyreinforcingacost-consciousculture,particularlyinabusinessincurringnetlosses.Wewillbalanceourfocusongrowthwithemphasisonlong-termprofitabilityandcapitalmanagement.Atthisstage,wechoosetoprioritizegrowthbecausewebelievethatscaleiscentraltoachievingthepotentialofourbusinessmodel.Wewillcontinuetofocusonhiringandretainingversatileandtalentedemployees,andcontinuetoweighttheircompensationtostockoptionsratherthancash.Weknowoursuccesswillbelargelyaffectedbyourabilitytoattractandretainamotivatedemployeebase,eachofwhommustthinklike,andthereforemustactuallybe,anowner.Wearentsoboldastoclaimthattheaboveistherightinvestmentphilosophy,butitsours,andwewouldberemissifwewerentclearintheapproachwehavetakenandwillcontinuetotake.Withthisfoundation,wewouldliketoturntoareviewofourbusinessfocus,ourprogressin1997,andouroutlookforthefuture.ObsessOverCustomersFromthebeginning,ourfocushasbeenonofferingourcustomerscompellingvalue.WerealizedthattheWebwas,andstillis,theWorldWideWait.Therefore,wesetouttooffercustomerssomethingtheysimplycouldnotgetanyotherway,andbeganservingthemwithbooks.Webroughtthemmuchmoreselectionthanwaspossibleinaphysicalstore(ourstorewouldnowoccupy6footballfields),andpresenteditinauseful,easy-to-search,andeasy-to-browseformatinastoreopen365daysayear,24hoursaday.Wemaintainedadoggedfocusonimprovingtheshoppingexperience,andin1997substantiallyenhancedourstore.Wenowoffercustomersgiftcertificates,1-Clickshopping,andvastlymorereviews,content,browsingoptions,andrecommendationfeatures.Wedramaticallyloweredprices,furtherincreasingcustomervalue.Wordofmouthremainsthemostpowerfulcustomeracquisitiontoolwehave,andwearegratefulforthetrustourcustomershaveplacedinus.RepeatpurchasesandwordofmouthhavecombinedtomakeAmazon.comthemarketleaderinonlinebookselling.Bymanymeasures,Amazon.comcamealongwayin1997:Salesgrewfrom$15.7millionin1996to$147.8million an838%increase.Cumulativecustomeraccountsgrewfrom180,000to1,510,000 a738%increase.Thepercentageofordersfromrepeatcustomersgrewfromover46%inthefourthquarterof1996toover58%inthesameperiodin1997.Intermsofaudiencereach,perMediaMetrix,ourWebsitewentfromarankof90thtowithinthetop20.Weestablishedlong-termrelationshipswithmanyimportantstrategicpartners,includingAmericaOnline,Yahoo!,Excite,Netscape,GeoCities,AltaVista,@Home,andProdigy. During1997,weworkedhardtoexpandourbusinessinfra
8 structuretosupportthesegreatlyincreasedt
structuretosupportthesegreatlyincreasedtraffic,sales,andservicelevels:Amazon.comsemployeebasegrewfrom158to614,andwesignificantlystrengthenedourmanagementteam.Distributioncentercapacitygrewfrom50,000to285,000squarefeet,includinga70%expansionofourSeattlefacilitiesandthelaunchofourseconddistributioncenterinDelawareinNovember.Inventoriesrosetoover200,000titlesatyear-end,enablingustoimproveavailabilityforourcustomers.Ourcashandinvestmentbalancesatyear-endwere$125million,thankstoourinitialpublicofferinginMay1997andour$75millionloan,affordingussubstantialstrategicflexibility.OurEmployeesThepastyearssuccessistheproductofatalented,smart,hard-workinggroup,andItakegreatprideinbeingapartofthisteam.Settingthebarhighinourapproachtohiringhasbeen,andwillcontinuetobe,thesinglemostimportantelementofAmazon.comssuccess.Itsnoteasytoworkhere(whenIinterviewpeopleItellthem,Youcanworklong,hard,orsmart,butatAmazon.comyoucantchoosetwooutofthree),butweareworkingtobuildsomethingimportant,somethingthatmatterstoourcustomers,somethingthatwecanalltellourgrandchildrenabout.Suchthingsarentmeanttobeeasy.WeareincrediblyfortunatetohavethisgroupofdedicatedemployeeswhosesacrificesandpassionbuildAmazon.com.Goalsfor1998WearestillintheearlystagesoflearninghowtobringnewvaluetoourcustomersthroughInternetcommerceandmerchandising.Ourgoalremainstocontinuetosolidifyandextendourbrandandcustomerbase.Thisrequiressustainedinvestmentinsystemsandinfrastructuretosupportoutstandingcustomerconvenience,selection,andservicewhilewegrow.Weareplanningtoaddmusictoourproductoffering,andovertimewebelievethatotherproductsmaybeprudentinvestments.Wealsobelievetherearesignificantopportunitiestobetterserveourcustomersoverseas,suchasreducingdeliverytimesandbettertailoringthecustomerexperience.Tobecertain,abigpartofthechallengeforuswilllienotinfindingnewwaystoexpandourbusiness,butinprioritizingourinvestments.WenowknowvastlymoreaboutonlinecommercethanwhenAmazon.comwasfounded,butwestillhavesomuchtolearn.Thoughweareoptimistic,wemustremainvigilantandmaintainasenseofurgency.Thechallengesandhurdleswewillfacetomakeourlong-termvisionforAmazon.comarealityareseveral:aggressive,capable,well-fundedcompetition;considerablegrowthchallengesandexecutionrisk;therisksofproductandgeographicexpansion;andtheneedforlargecontinuinginvestmentstomeetanexpandingmarketopportunity.However,aswevelongsaid,onlinebookselling,andonlinecommerceingeneral,shouldprovetobeaverylargemarket,anditslikelythatanumberofcompanieswillseesignificantbenefit.Wefeelgoodaboutwhatwevedone,andevenmoreexcitedaboutwhatwewanttodo.1997wasindeedanincredibleyear.WeatAmazon.comaregratefultoourcustomersfortheirbusinessandtrust,toeachotherforourhardwork,andtoourshareholdersfortheirsupportandencouragement. JeffreyP.BezosFounderandChiefExecutiveOfficerAmazon.com,I