致我们的股东、顾客和员工：
过去的三年半一直令人振奋。1998年，我们已累计为620万名用户提供了服务；我们的年收入达10亿美元；在美国，我们新上线音乐、视频及礼品店；英国和德国的亚马逊网站今年开始运营；就在最近，我们启动了亚马逊拍卖业务。
我们预计下一个三年半将会更加激动人心。我们致力于打造一个购物平台，数亿用户将在线上选购商品，在这里可以买到想要寻找的一切商品。这才真正是互联网的“ Day 1”。如果我们经营得当，这依然会是亚马逊的“ Day 1”。目前来看这或许难以想象，但我们认为，我们面临的机遇和风险将比过去更为巨大。我们将有意识地做出许多决定，其中将不乏大胆、突破常规的决策。我们希望有些最终能取得成功。当然，有些决定也难免犯错。
回顾1998年（A Recap of 1998）
专注于用户体验帮助我们在1998年取得十分大的进步：
� 销售额由1997年的1.48亿美元增加至1998年的6.1亿美元，同比增速为313%；
� 累计用户数由1997年底的150万增加至1998年底的620万，增长超过300%；
� 不仅新增用户增速惊人，亚马逊网站的重复购买率由1997年第四季度的58%增加至1998年第四季度的64%。
� 我们产品扩张的第一步---亚马逊音乐店，在上线第一个季度后，就成为了行业领先的在线音乐零售商。
� 我们将Amazon.co.uk和Amazon.de 塑造成为英德两国市场上领先在线书店，1998年第四季度，亚马逊英国和德国店第四季度的销售额环比增长近四倍。
� 在推出亚马逊音乐店后，1998年11月我们又相继推出了影视和礼品店 ，我们仅仅用了6周的时间就成为行业领先的在线视频商。
� 1998年第四季度，亚马逊25%的销售额来自Amazon.co.uk, Amazon.de, 以及亚马逊网站上新提供的音乐、影视、礼品销售几项新起的业务。
� 我们通过创新，如一键购物（1-Click Shopping）、销售排行（store-wide sales rank）、礼品点击（Gift Click）、以及即时推荐等来大幅改善用户体验。
� 1998年公司的营收和客户增长，以及如何确保1999年的持续增长，将依赖于我们基础设施的扩张。
� 1998年公司员工总数由600左右增加到超过2100，公司管理层队伍不断壮大。
� 我们在英、德两国建立了物流和客户服务中心。在1999年初，我们宣布在Fernley, Nevada租赁了一个面积达323，000平方英尺的高效的物流中心，这将会使我们目前物流能力翻番，同时也会使进一步提高我们配送服务速度。
� 库存由1998年初的900万美元增加至年末的3000万美元，库存的增加提高了我们的产品供应能力。与此同时，我们也可通过从制造商那边直接采购的方式，来降低成本。
� 我们的现金和投资余额目前已超过15亿美元（其中包括了1998年5月发行的高息债以及1999年发行的可转债），这在很大程度上增强了我们的财务实力和保证了公司战略的灵活性。
热衷于投资并精简高效（cash-favored and capital efficient）的商业模式，带给我们成长，对此我们感到很幸运。我们不需要建立实体店和为分别为它们建设库房，亚马逊集中管理的仓储物流模式，可以使我们在仅仅投入3000万美元厂房和3000万美元设备，便可获得10亿美元的销售额。在1998年，我们共产生了3100万美元的运营现金流，这一数字要比我们固定资产总值多2800万美元。
我们的客户（Our Customers）
我们力图建立一个全球最大的以客户为中心的公司。我们坚持这一理念——用户是有洞察能力的，是明智的，品牌形象必须名副其实，不能倒过来。我们的客户告诉我们，他们之所以选择亚马逊，并能够口碑相传，是因为，我们这里的选择多，操作简单，价格低并且服务好。
但我们不能自满而懈怠。我经常提醒员工们每天早上起来后要有危机感。我们担心的不是竞争，而是我们的客户。用户成就了我们，他们与我们息息相关，我们要对他们负很大的责任。我们希望他们始终保持着对亚马逊的忠诚度，除非谁能提供更周到的服务。
我们必须不断坚持改进、探索、创新。我们喜欢做开拓者，这就是亚马逊的DNA，我们需要这种开拓精神带给我们成功，因此，这非常好。不断的创新和和坚持以用户体验为核心，使得我们与众不同，对此我们感到很自豪。我们在1998年的所做的一切就反映了这一点：跟亚马逊美国书店一样，音乐、影视、英国和德国新店都成为了最好的产品。
努力并乐于工作、成就历史（WorkHard, Have Fun, Make History）
如果没有非凡的人才，在互联网行业中是不可能取得如此成就的。但创造历史并不是一件容易的事，我们现在拥有2100名聪明、勤快、热情的员工，他们将服务客户视为己任。设置较高的人才招聘门槛，在过去以及今后仍将成为亚马逊成功的一个重要因素。
招聘期间，我们要求应聘者在做决定之前考虑下面三个问题：
你钦佩这类人吗？（Will youadmire this person?）
仔细想想你生命中令你钦佩的人，他们可能是你学习的榜样。对于我来说，我总是努力与我所钦佩的人打交道， 我鼓励员工也去这样做。
这个人能提高团队的效率吗？（Will thisperson raise the average level of effectiveness of the group they are entering?）
我们招聘人才的标准还会继续提高。 我要求应聘者设想公司未来五年发展情况。从这一点来讲，亚马逊所有员工都应该说：“现在的标准太高了吧？”，我很高心自己能进入亚马逊。
这个人在哪些方面是superstar？（Along what dimension might this person be a superstar?）
亚马逊员工中有许多人都身怀绝技，拥有独特的兴趣爱好和想法，这些都可以活跃我们的工作气氛。我知道某员工曾是1978年的“全国拼字比赛”冠军。我想，尽管这些可能在平时用不到，但如果你偶尔在大厅里拦住她，挑战他，必将活跃工作气氛。
1999年目标（Goals for 1999）
我认为未来整个电商的机会是巨大的，1999年将会成为重要一年。尽管亚马逊已经建立了一个领先地位，但可以肯定的是，行业竞争将会进一步加剧。我们将加大投资来打造一个拥有数10亿美元营收，上千万用户的高效运营平台。
尽管这种投资成本很大，同时存在诸多不确定性。但我们认为，这些投资将会给用户提供最好的端对端体验，为投资者带来低风险的长期价值。
1999年的计划可能不会超出你的预料：
物流能力：我们打算建立一个庞大的物流中心来保证用户所需的订单，并实现快速与产品库存对接。
系统能力：我们将提升我们的系统能力，来匹配业务增长。系统团队的艰巨任务包括：扩大系统容量来满足短期业务增长、针对数十亿美元营收规模和数千万用户来调整系统，为新业务和创新建立新功能和系统，提高运营能力和效率。
品牌保证：相对于其他线下零售商来说，亚马逊现在还是一个规模较小的年轻的公司。在这个重要时期，我们必须确保建立更广范、更强的客户关系。
扩大产品和服务种类：1999年我们将继续增加产品和服务种类，并推出新业务。亚马逊拍卖是我们最近推出的新服务。如果你们当中有人还没有体验过这种新服务，我建议你们赶紧去试试。作为亚马逊的用户，你可以同时去“拍“或”卖“。作为卖家，你将会获得800万亚马逊在线资深用户。
我们通过推出新产品和服务、扩展新区域以及收购来丰富我们的业务。我们计划在团队、工作流程、沟通以及人员发展方面增加投入。这种方式的规模发展是我们计划中最具挑战，最难的部分。
亚马逊在过去几年中已经取得了巨大成就，但未来我们要走的路还很长。我们很乐观，但我也知道，我们必须时刻保持紧迫感。激进的对手、扩张而带来的增长挑战和执行风险，为扩大市场机会而追加投资等等，都是我目前面临的挑战。
在这份信中，我想说的最重要的事情已经在去年的信中说过了，也就是我们的长期投资计划。我们为新股东（今年我们打印了超过20万份信，去年我们打印了13份）准备了1997年致股东的信，并附在这封信的后面。我希望你能再去读读小标为“注重长远价值“那部分内容。你可能会想多读几遍，以确保亚马逊是你理想的投资标的。我们并不认为这是至理名言，但我们只是认为，这是属于我们自己的信条。
谢谢我们的用户、股东，以及那些为了打造一个伟大的、永恒的公司而每天热情工作的员工。
杰弗里·贝索斯
亚马逊公司创始人、首席执行官
To our shareholders, customers, and employees:
The last 3½ years have been exciting. We’ve served acumulative 6.2 million
customers, exited 1998 with a $1 billion revenue runrate, launched music, video, and gift stores in the U.S., opened shop in theU.K. and Germany, and, just recently, launched Amazon.com Auctions. We predictthe next 3½ years will be even more exciting. We are working to build a placewhere tens of millions of customers can come to find and discover anything theymight want to buy online. It is truly Day 1 for the Internet and, if we executeour business plan well, it remains Day 1 for Amazon.com. Given what’s happened,it may be difficult to conceive, but we think the opportunities and risks aheadof us are even greater than those behind us. We will have to make manyconscious and deliberate choices, some of which will be bold andunconventional. Hopefully, some will turn out to be winners. Certainly, somewill turn out to be mistakes.
A Recap of 1998
Heads-down focus on customers helped us make substantialprogress in 1998:
� Sales grewfrom $148 million in 1997 to $610 million – a 313% increase.
� Cumulativecustomer accounts grew from 1.5 million at the end of 1997 to 6.2 million atthe end of 1998 – an increase of over 300%.
� Despitethis strong new customer growth, the percentage of orders placed on theAmazon.com Web site by repeat customers grew from over 58% in the fourthquarter of 1997 to over 64% in the same period in 1998.
� Our firstmajor product expansion, the Amazon.com music store, became the leading onlinemusic retailer in its first full quarter.
� Followingtheir October launch under the Amazon brand and with Amazon.com technology, thecombined fourth-quarter sales in the U.K. and German stores nearly quadrupledover the third quarter, establishing Amazon.co.uk and Amazon.de as the leadingonline booksellers in their markets.
� Theaddition of music was followed by the addition of video and gifts in November,and we became the leading online video retailer in only 6 weeks.
� 25% of ourfourth-quarter 1998 sales was derived from Amazon.co.uk, Amazon.de, and music,video, and gift sales on Amazon.com, all very new businesses.
� Wesignificantly improved the customer experience, with innovations like 1-ClickSMshopping, Gift Click,store-wide sales rank, and instant recommendations.
1998’s revenue and customer growth and achievement ofcontinued growth in 1999 were and are dependent on expansion of ourinfrastructure. Some highlights:
� In 1998our employee base grew from approximately 600 to over 2,100, and wesignificantly strengthened our management team.
� We openeddistribution and customer service centers in the U.K. and Germany, and in early1999, announced the lease of a highly-mechanized distribution center ofapproximately 323,000 square feet in Fernley, Nevada. This latest addition willmore than double our total distribution capacity and allows us to even furtherimprove time-to-mailbox for customers.
� Inventoriesrose from $9 million at the beginning of the year to $30 million by year end,enabling us to improve product availability for our customers and improveproduct costs through direct purchasing from manufacturers.
� Our cashand investment balances, following our May 1998 high yield debt offering andearly 1999 convertible debt offering, now stand at well over $1.5 billion (on apro forma basis), affording us substantial financial strength and strategicflexibility.
We’re fortunate to benefit from a business model that iscash-favored and capital efficient. As we do not need to build physical storesor stock those stores with inventory, our centralized distribution model hasallowed us to build our business to a billion-dollar sales rate with just $30million in inventory and $30 million in net plant and equipment. In 1998, wegenerated $31 million in operating cash flow which more than offset net fixedasset additions of $28 million.
Our Customers
We intend to build the world’s most customer-centriccompany. We hold as axiomatic that customers are perceptive and smart, and thatbrand image follows reality and not the other way around. Our customers tell usthat they choose Amazon.com and tell their friends about us because of the selection,ease-of-use, low prices, and service that we deliver.
But there is no rest for the weary. I constantly remindour employees to be afraid, to wake up every morning terrified. Not of ourcompetition, but of our customers. Our customers have made our business what itis, they are the ones with whom we have a relationship, and they are the onesto whom we owe a great obligation. And we consider them to be loyal to us –right up until the second that someone else offers them a better service.
We must be committed to constant improvement,experimentation, and innovation in every initiative. We love to be pioneers,it’s in the DNA of the company, and it’s a good thing, too, because we’ll needthat pioneering spirit to succeed. We’re proud of the differentiation we’vebuilt through constant innovation and relentless focus on customer experience,and we believe our initiatives in 1998 reflect it: our music, video, U.K. andGerman stores, like our U.S. bookstore, are best of breed.
Work Hard, Have Fun, Make History
It would be impossible to produce results in anenvironment as dynamic as the Internet without extraordinary people. Working tocreate a little bit of history isn’t supposed to be easy, and, well, we’refinding that things are as they’re supposed to be!
We now have a team of 2,100 smart, hard-working,passionate folks who put customers first. Setting the bar high in our approachto hiring has been, and will continue to be, the single most important elementof Amazon.com’s success.
During our hiring meetings, we ask people to considerthree questions before making
a decision:
� Will you admire this person?
f you think about the people you’ve admired in your life,they are probably people you’ve been able to learn from or take an examplefrom. For myself, I’ve always tried hard to work only with people I admire, andI encourage folks here to be just as demanding. Life is definitely too short todo otherwise.
� Will this person raise the average level of effectiveness of the groupthey’re entering?
We want to fight entropy. The bar has to continuously goup. I ask people to visualize the company 5 years from now. At that point, eachof us should look around and say, “The standards are so high now -- boy, I’mglad I got in when I did!”
� Along what dimension might this person be a superstar?
Manypeople have unique skills, interests, and perspectives that enrich the workenvironment for all of us. It’s often something that’s not even related totheir jobs. One person here is a National Spelling Bee champion (1978, Ibelieve). I suspect it doesn’t help her in her everyday work, but it does makeworking here more fun if you can occasionally snag her in the hall with a quickchallenge: “onomatopoeia!”
Goals for 1999
As we look forward, we believe that the overalle-commerce opportunity is enormous, and 1999 will be an important year.Although Amazon.com has established a strong leadership position, it is certainthat competition will even further accelerate. We plan to invest aggressivelyto build the foundation for a multi-billion-dollar revenue company serving tensof millions of customers with operational excellence and high efficiency.
Although this level of forward investment is costly andcarries many inherent risks, we believe it will provide the best end-to-endexperience for customers, and actually offer the least risky long-term valuecreation approach for investors.
The elements of our 1999 plan may not surprise you:
Distributioncapacity We intendto build out a significant distribution infrastructure to ensure that we cansupport all the sales our customers demand, with speedy access to a deep productinventory.
Systemscapacity We’ll beexpanding our systems capacity to support similar growth levels. The systemsgroup has a significant task: expand to meet near term growth, restructuresystems for multi-billion dollar scale and tens of millions of customers, buildout features and systems for new initiatives and new innovations, and increaseoperational excellence and efficiency. All while keeping a billion dollar, 8 millioncustomer store up and available on a 24x7 basis.
Brandpromise Amazon.com is still a small and young companyrelative to the major offline retailers, and we must ensure that we build wide,strong customer relationships during this critical period.
Expandedproduct and service offerings In 1999, we will continue to enhancethe
scope of our current product and service offerings, aswell as add new initiatives.
Amazon.com Auctions is our most recent addition. If anyof you have not tried this new service, I encourage you to run – not walk – to www.amazon.comand clickon the Auctions tab. As an Amazon.com customer, you are pre-registered to bothbid and sell.
As a seller, you have access to Amazon.com’s 8 millionexperienced online shoppers. Bench strength and processes − We’ve complicated our businessdramatically with new products, services, geographies, acquisitions andadditions to our business model.
We intend to invest in teams, processes, communicationand people development practices. Scaling in this way is among the mostchallenging and difficult elements of our plan.
Amazon.com has made a number of strides forward in thepast year, but there is still an enormous amount to learn and to do. We remainoptimistic, but we also know we must remain vigilant and maintain a sense ofurgency. We face many challenges and hurdles.
Among them, aggressive, capableand well-funded competition; the growth challenges and execution riskassociated with our own expansion; and the need for large continuing investmentsto meet an expanding market opportunity.
The mostimportant thing I could say in this letter was said in last years’ letter,which detailed our long-term investment approach. Because we have so many newshareholders (this year we’re printing more than 200,000 of these letters –last year we printed about 13,000), we’ve appended last year’s letterimmediately after this year’s. I invite you to please read the section entitledIt’s All About the Long Term. Youmight want to read it twice to make sure we’re the kind of company you want tobe invested in. As it says there, we don’t claim it’s the right philosophy, wejust claim it’s ours!
All the best and sincere thanks once again to ourcustomers and shareholders and all the folks here who are working passionatelyevery day to build an important and lasting company.
Jeffrey P. Bezos
Founder and Chief Executive Officer
Amazon.com, Inc.