To our shareholders:

Amazon.com passed many milestones in 1997: by year-end, we had served more than 1.5 million customers, yielding 838% revenue growth to $147.8 million, and extended our market leadership despite aggressive competitive entry.

But this is Day 1 for the Internet and, if we execute well, for Amazon.com. Today, online commerce saves customers money and precious time. Tomorrow, through personalization, online commerce will accelerate the very process of discovery. Amazon.com uses the Internet to create real value for its customers and, by doing so, hopes to create an enduring franchise, even in established and large markets.
然而,这只是互联网的第一日(Day 1)。若我们做得好,也只是Amazon的第一日。今天,电子商务(Online Commerce)节省了消费者的金钱和宝贵的时间。明天,透过个性化服务,电子商务将会加速人们发掘新事物的过程。 Amazon持续利用互联网带给消费者价值,希望即使是在成熟的大型市场中,也能建立一个近乎特许的市场领先地位。

We have a window of opportunity as larger players marshal the resources to pursue the online opportunity and as customers, new to purchasing online, are receptive to forming new relationships. The competitive landscape has continued to evolve at a fast pace. Many large players have moved online with credible offerings and have devoted substantial energy and resources to building awareness, traffic, and sales. Our goal is to move quickly to solidify and extend our current position while we begin to pursue the online commerce opportunities in other areas. We see substantial opportunity in the large markets we are targeting. This strategy is not without risk: it requires serious investment and crisp execution against established franchise leaders.

It’s All About the Long Term

We believe that a fundamental measure of our success will be the shareholder value we create over the long term. This value will be a direct result of our ability to extend and solidify our current market leadership position. The stronger our market leadership, the more powerful our economic model. Market leadership can translate directly to higher revenue, higher profitability, greater capital velocity, and correspondingly stronger returns on invested capital.

Our decisions have consistently reflected this focus. We first measure ourselves in terms of the metrics most indicative of our market leadership: customer and revenue growth, the degree to which our customers continue to purchase from us on a repeat basis, and the strength of our brand. We have invested and will continue to invest aggressively to expand and leverage our customer base, brand, and infrastructure as we move to establish an enduring franchise.

Because of our emphasis on the long term, we may make decisions and weigh tradeoffs differently than some companies. Accordingly, we want to share with you our fundamental management and decision-making approach so that you, our shareholders, may confirm that it is consistent with your investment philosophy:

We will continue to focus relentlessly on our customers.
* • We will continue to make investment decisions in light of long-term market leadership considerations rather than short-term profitability considerations or short-term Wall Street reactions.
* • 我们将会持续根据长期市场领先地位做投资决策,而不是短期获利能力或是华尔街的短期反应。

* • We will continue to measure our programs and the effectiveness of our investments analytically, to jettison those that do not provide acceptable returns, and to step up our investment in those that work best. We will continue to learn from both our successes and our failures.
* • 我们将会持续衡量我们的计划和投资的有效性,舍弃仅能提供低回报的投资,加大表现最好的投资。我们将会持续从成功和失败中学习。

* • We will make bold rather than timid investment decisions where we see a sufficient probability of gaining market leadership advantages. Some of these investments will pay off, others will not, and we will have learned another valuable lesson in either case.
* • 当获得市场领先地位的可能性足够大时,我们将会做大胆的投资决策。有些投资会获得回报,有些则不会。无论是否获得回报,我们将会从投资中学习。

* • When forced to choose between optimizing the appearance of our GAAP accounting and maximizing the present value of future cash flows, we’ll take the cash flows.
* • 当被迫在优化会计报表和最大化未来现金流的现值之间做选择时,我们会选择现金流。

* • We will share our strategic thought processes with you when we make bold choices (to the extent competitive pressures allow), so that you may evaluate for yourselves whether we are making rational long-term leadership investments.
* • 在允许的情况下,当我们做大胆的决策时,我们会和你分享我们决策过程中的思考,这样一来你就能评估我们是否在做合理的长期投资决策。

* • We will work hard to spend wisely and maintain our lean culture. We understand the importance of continually reinforcing a cost-conscious culture, particularly in a business incurring net losses.
* • 我们将理性花费金钱并维持我们的精益文化。我们了解强调注重成本的文化是多么的重要,尤其是在一间净亏损的公司里。

* • We will balance our focus on growth with emphasis on long-term profitability and capital management. At this stage, we choose to prioritize growth because we believe that scale is central to achieving the potential of our business model.
* • 我们将会在长期获利能力增长和资本管理之间取得平衡。在此阶段,我们优先考虑增长,因为我们认为规模对商业模式至关重要。

* • We will continue to focus on hiring and retaining versatile and talented employees, and continue to weight their compensation to stock options rather than cash. We know our success will be largely affected by our ability to attract and retain a motivated employee base, each of whom must think like, and therefore must actually be, an owner.
* • 我们将会持续注重聘雇与留用有才能的员工,以股票选择权而非现金来衡量他们的贡献。我们知道成功将奠基于我们是否能吸引人才,并建立一个积极进取的人才库。因为每个员工都必须像个老板一样去思考,因此员工本身必须就是Amazon的老板,这就是为什么我们提供员工股票选择权。

We aren’t so bold as to claim that the above is the "right" investment philosophy, but it’s ours, and we would be remiss if we weren’t clear in the approach we have taken and will continue to take.

With this foundation, we would like to turn to a review of our business focus, our progress in 1997, and our outlook for the future.

Obsess Over Customers

From the beginning, our focus has been on offering our customers compelling value. We realized that the Web was, and still is, the World Wide Wait. Therefore, we set out to offer customers something they simply could not get any other way, and began serving them with books. We brought them much more selection than was possible in a physical store (our store would now occupy 6 football fields), and presented it in a useful, easy-to-search, and easy-to-browse format in a store open 365 days a year, 24 hours a day. We maintained a dogged focus on improving the shopping experience, and in 1997 substantially enhanced our store. We now offer customers gift certificates, 1-Click(SM) shopping, and vastly more reviews, content, browsing options, and recommendation features. We dramatically lowered prices, further increasing customer value. Word of mouth remains the most powerful customer acquisition tool we have, and we are grateful for the trust our customers have placed in us. Repeat purchases and word of mouth have combined to make Amazon.com the market leader in online bookselling.
从一开始,我们的重点一直都是向消费者提供价值。我们意识到,Web以前是,而且现在依然只是全球范围的等待(World Wide Wait)。因此,我们着手为消费者提供无法在别处得到的东西,并开始向他们提供书籍。我们带给他们远超实体店面的书籍选择(Amazon商店的书籍可以占满6个足球场),在一年365天,每天24小时开放的商店中,以实用、易于搜索和浏览的方式展售书籍。我们执着于改进消费体验,并于1997年大幅改进商店。我们现在向消费者提供礼券、一键购物,以及更多的评论、内容、浏览选择和推荐功能。我们大幅降低价格,进一步向消费者提供更多价值。口碑仍是我们最强大的获客手段。对于消费者的信任,我们很感谢。重复购买和口碑,两者结合造就Amazon在书籍电商领域的市场领先地位。

By many measures, Amazon.com came a long way in 1997:

* • Sales grew from $15.7 million in 1996 to $147.8 million — an 838% increase.
* • 消费额增长838%,从1996年的1570万,提升到1亿4780万。

* • Cumulative customer accounts grew from 180,000 to 1,510,000 — a 738% increase.
* • 消费者账户数增长738%,从18万,提升到151万。

* • The percentage of orders from repeat customers grew from over 46% in the fourth quarter of 1996 to over 58% in the same period in 1997.
* • 1996年第四季度,由旧用户购买产生的订单,占整体订单的46%,1997年第四季度则提升至超过58%。

* • In terms of audience reach, per Media Metrix, our Web site went from a rank of 90th to within the top 20.
* • 从受众触及的角度而言,Amazon的网站排名从90名,提升到前20名。

* • We established long-term relationships with many important strategic partners, including America Online, Yahoo!, Excite, Netscape, GeoCities, AltaVista, @Home, and Prodigy.
* • 我们与以下重要战略伙伴建立长期关系:美国在线(America Online)、雅虎(Yahoo!)、入口网站Excite、网景(Netscape)、地球村(GeoCities)、搜索引擎AltaVista、零售商@Home和在线服务商Prodigy。


During 1997, we worked hard to expand our business infrastructure to support these greatly increased traffic, sales, and service levels:

* • Amazon.com’s employee base grew from 158 to 614, and we significantly strengthened our management team.
* • Amazon的员工从158人提升至614人,我们大幅加强管理团队。

* • Distribution center capacity grew from 50,000 to 285,000 square feet, including a 70% expansion of our Seattle facilities and the launch of our second distribution center in Delaware in November.
* • 配送中心从5万平方英尺提升至28万5千平方英尺,其中包含我们西雅图工厂扩建70%空间,以及我们位于特拉华州(Delaware),11月要启动的第二个配送中心。

* • Inventories rose to over 200,000 titles at year-end, enabling us to improve availability for our customers.
* • 到了年底,存货将超过20万种,消费者将会有更多选择。
* • Our cash and investment balances at year-end were $125 million, thanks to our initial public offering in May 1997 and our $75 million loan, affording us substantial strategic flexibility.

* • 得益于1997年5月的首次公开募股,以及7500万美元的贷款,到年底,我们的现金和投资余额为1亿2500万,为我们提供了极大的战略灵活性。

Our Employees

The past year’s success is the product of a talented, smart, hard-working group, and I take great pride in being a part of this team. Setting the bar high in our approach to hiring has been, and will continue to be, the single most important element of Amazon.com’s success.

It’s not easy to work here (when I interview people I tell them, “You can work long, hard, or smart, but at Amazon.com you can’t choose two out of three”), but we are working to build something important, something that matters to our customers, something that we can all tell our grandchildren about. Such things aren’t meant to be easy. We are incredibly fortunate to have this group of dedicated employees whose sacrifices and passion build Amazon.com.

Goals for 1998

We are still in the early stages of learning how to bring new value to our customers through Internet commerce and merchandising. Our goal remains to continue to solidify and extend our brand and customer base. This requires sustained investment in systems and infrastructure to support outstanding customer convenience, selection, and service while we grow. We are planning to add music to our product offering, and over time we believe that other products may be prudent investments. We also believe there are significant opportunities to better serve our customers overseas, such as reducing delivery times and better tailoring the customer experience. To be certain, a big part of the challenge for us will lie not in finding new ways to expand our business, but in prioritizing our investments.

We now know vastly more about online commerce than when Amazon.com was founded, but we still have so much to learn. Though we are optimistic, we must remain vigilant and maintain a sense of urgency. The challenges and hurdles we will face to make our long-term vision for Amazon.com a reality are several: aggressive, capable, well-funded competition; considerable growth challenges and execution risk; the risks of product and geographic expansion; and the need for large continuing investments to meet an expanding market opportunity. However, as we’ve long said, online bookselling, and online commerce in general, should prove to be a very large market, and it’s likely that a number of companies will see significant benefit. We feel good about what we’ve done, and even more excited about what we want to do.

1997 was indeed an incredible year. We at Amazon.com are grateful to our customers for their business and trust, to each other for our hard work, and to our shareholders for their support and encouragement.

Jeffrey P. Bezos
Founder and Chief Executive Officer
Amazon.com, Inc.












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