一切都围绕长期价值展开（It’s All About Long Term）
我们会继续面向长期做出决策，而不是短期的股票收益。 我们会持续从我们的成功和失败中学习，通过认真的分析，放弃那些不能带来回报的项目，加码那些好项目的投入。 在极大可能扩大我们市场领先地位的机会面前，我们将会更加大胆的做出投资决定。无论成败，都会是对我们很好的教育。 如果我们必须在更好看的财报和最大化现金流两者中做出抉择，我们选择后者。 我们在做出重大决定时会与你们分享，这样你们就可以自己评估我们是否为长期发展做出了理智的投入。 我们会努力做到精打细算。我们知道在这个会带来净亏损的行业中，对代价的感知能力有多重要。 在增长中，我们会更加关注长期的盈利和资本的管理。在这个阶段，我们选择优先增长，因为我们相信规模效应。 我们会持续吸纳并保留优秀的人才。相比于固定工资，我们更青睐股权激励。因为我们深知成功将会决定于具有动力的团队，他们必须保持一条心，这也意味着他们必须成为企业的一部分。
从一开始，我们就力图持续给客户创造价值。我们发现Web从古至今一直是“万维等（World Wide Wait）”。所以，我们决定提供他们没法在别处获得的东西——书。我们为客户提供了他们在任何一家实体书店都不可能得到的海量选择（我们现在的图书仓储能装进6个足球场），并且，我们把这家“书店”开成了方便查找、方便浏览的24小时全年无休的书店。我们像狗一样顽固的关注于提升用户体验，在今年我们大大升级了我们的网上书店。现在我们提供礼品卡、一键购物的服务，并且有大量的书评、内容预览和推荐功能。我们把价格降到了不可思议的低，却提供了不断增长的价值。客户的口耳相传是我们最有力的资本，我们也因此非常感谢他们的支持。重复的购买和客户间的传播让Amazon.com成为了最牛逼的网上书城。
从很多维度看，Amazon.com今年都走得太远了： 销售额从去年的1570万美刀到如今的1.47亿美刀，丫838%的增长啊有木有！ 用户数量从18万增长至151万，738%的增长 复购率从去年第四季度的46%到今年同期的58% 网站的访问量排名，我们从90名爬升至前20* 我们和很多大佬都搞好了关系，建立了战略性长期合作，包括美国在线，雅虎，Excite，网景，GeoCities，AltaVista，@Home和Prodigy
97年，我们非常努力的扩充我们的平台来适应高速的增长： 亚马逊员工从158人扩展到614人，并且我们尤其加强了管理团队 分拣中心容量从5万平方公尺扩张到28万平方公尺，包括我们在西雅图的仓库70%的扩建和11月在Delaware新建的仓库。 存货到年终增长了20万册，让我们能更好的服务客户 计入5月IPO的进账和我们7500万的贷款，我们的资产达到了12.5亿，这让我们有很强的战略弹性。
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.
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.
• 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.
• 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.
• 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.
• 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.
• 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.
• 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.
• 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.
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.
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.
• Cumulative customer accounts grew from 180,000 to 1,510,000 -- a 738% increase.
• 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.
• In terms of audience reach, per Media Metrix, our Web site went from a rank of 90th to within the top 20.
• We established long-term relationships with many important strategic partners, including America Online, Yahoo!, Excite, Netscape, GeoCities, AltaVista, @Home, and 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.
• 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.
• Inventories rose to over 200,000 titles at year-end, enabling us to improve availability for our customers.
• 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.
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.
/s/ JEFFREY P. BEZOS
Jeffrey P. Bezos
Founder and Chief Executive Officer