by Elton Gomes
Amazon became the second company to be valued at $1 trillion, just a few week after Apple crossed the milestone first. Amazon’s share prices increased on Tuesday, and briefly took the company above the trillion dollar mark for the first time.
Amazon was founded by Jeff Bezos in 1994, and less than 25 years later, it has managed to gain a foothold in everything from retail, to groceries, to video streaming, helping it rack up revenues of $178 billion.
As Amazon crossed the $1 trillion mark, Bezos became the world’s richest man with a net worth estimated to be around $167 billion on Tuesday.
In 1997, Amazon went public at $18 a share. On Tuesday those shares reached rates of $2,050, thus pushing the value of the company over $1 trillion.
The company that began by selling books and CDs online has turned into a gargantuan corporation that makes money from hosting websites such as Airbnb, Netflix, and Unilever. Amazon Web Services is currently at the forefront of gaining a $10 billion contract to provide cloud computing for the US Department of Defense.
How Amazon changed the retail experience
Amazon was a front-runner in changing the retail game when online shopping was an alien concept. Bricks-and-mortar bookstores had a headache trying to compete with Amazon as the company sold books for less and launched Kindle, a reading device wherein readers could download books instead of physically carrying them around. Through its website, Amazon.com, the company heralded the shift in online shopping – a shift that compelled retailers like HBC and Sears to spend big bucks in building their own websites.
Amazon has been credited with making online shopping safe for everyone, as the Economist noted in an article posted on the 20th anniversary: Typing your credit card into a web browser was once considered a sign of insanity until Amazon showed how easy and safe buying things online could be, the Star reported.
Amazon has also been known to pioneers of free shipping. In some markets, members of Amazon Prime can enjoy free shipping and pay a small fee to have Amazon Now products delivered within two hours.
How Amazon Prime initiative contributed to Amazon’s success
Amazon Prime can be said to be the foundation of Amazons success. The $99-a-year membership program focuses on customers, and gives consumers access to free two- and same-day shipping, streaming music, streaming video, and a list of other perks. Membership in Amazon Prime reportedly doubled in less than two years. It had been estimated that there were fewer than seven million subscribers at the start of 2012, and approximately 4 million members in the fall of 2011.
Amazon joins Apple
The Jeff Bezos-led company joined Apple in the crossing the $1 trillion mark. Started in 1976, Apple became the first publicly listed US company to be valued at $1 trillion. The tech companys stock jumped 2.8 percent to as high as $207.05, bringing its gain to about 9 percent since July 31. Apple reached $1 trillion market capitalisation 42 years after it was founded and 117 years after US Steel became the first company to be valued at $1 billion in 1901.
Elton Gomes is a staff writer at Qrius