19 Facts You May Not Have Known About Amazon.com

Source: Wikimedia Commons.

Amazon.com (NASDAQ: AMZN), now a $331 billion online powerhouse, is one of the most successful companies of the past several decades, and shares have multiplied an astounding 710 times since the company went public in 1997. Here are 19 other facts you may not have known about the e-commerce darling.

1. Amazon could very well be in the early innings of its growth potential. Consider: U.S. e-commerce sales now account for only 7.4% of total retail sales, according to the U.S. Census Bureau. This percentage has steadily marched upward since 2006, when online sales accounted for 2.8% of total retail sales:

E-commerce sales as a percentage of total retail sales. Source: U.S. Census Bureau.

2. One in every 10 Americans -- 10.7% of the population, to be exact -- has an Amazon Prime membership. What's more astounding is that Prime subscribers spend an average of $1,200 annually, compared with $700 for non-subscribers, according to GeekWire.

3. Prime Now, the company's on-call local delivery service, will probably push e-commerce sales further as the service expands. Keep in mind that Prime Now is available in only 20 metro areas right now -- but that's up from zero just over one year ago.

4. Former Top Gear host Jeremy Clarkson recently told us about the company's drone program, which aims to deliver items in 30 minutes.

5. Amazon's fastest order delivered to date was a four-pack of Starbucks vanilla Frappuccino to a customer in Miami. The delivery was made in under 10 minutes.

6. Amazon owns the patent on any one-click online checkout process. Other companies wanting to offer one-click checkout must license the patent from Amazon. (However, Amazon's patent on the technology will disappear in 2017.)

7. Amazon built a completely separate $6 billion-revenue business in under a decade. Amazon's cloud-division revenue is now bigger than that of its four nearest competitors combined. In fact, Amazon finally pulled back the curtain on Amazon Web Services, or AWS, revealing that it generated $1.57 billion in revenue in the most recent quarter. Some estimates have pegged AWS's value at up to $50 billion.

8. Alphabet's (NASDAQ: GOOG)(NASDAQ: GOOGL) Google went on record claiming that Amazon is its biggest competitor in search advertising. In fact, Amazon's secretive engineering lab in Palo Alto, Calif., called A9, was originally built to unseat Google in search advertising. Fast-forward to today, and the lab is still relatively secretive and has advanced Amazon's product search and advertising technology.

9. Amazon and Google have been engaged in an engineer talent war for years. The most publicized engineer to leave Amazon was Udi Manber, whom Google poached from A9 to lead its bread-and-butter search advertising business.

10. Jeff Bezos scored early investments in some of the biggest era-defining tech trends, including Twitter, AirBNB, and Uber. His net worth may also be a few billion dollars higher than what's been reported in the media. In 1998, Bezos cut Google co-founders Larry Page and Sergey Brin a $250,000 check to fund their start-up. It's estimated his cost basis in Google stock is anywhere from $0.04 to $0.06 per share. Unfortunately for curious outsiders, Bezos hasn't commented on whether he still owns shares.

11. Before founding Amazon, Bezos was a computer scientist at hedge-fund titan D.E. Shaw, which has amassed $30 billion in assets under management.

12. Amazon-owned shoe retailer Zappos is a pioneer in corporate culture. The company recently underwent a massive shift by implementing what it calls "holocracy" -- an on-the-fringes culture and organizational structure in which hierarchy is nonexistent. Zappos offered employees a three-month severance if they didn't believe in the approach and desired to leave, and 14% of the workforce did just that.

13. Speaking of Zappos, Amazon strong-armed it into being bought out. Zappos rebuffed Amazon's first acquisition offer, but Bezos didn't relent. He next built a website called Endless.com that specialized in selling shoes while undercutting Zappos on price. While Zappos' sales continued to skyrocket, the company hit a rough patch in 2008 after overextending itself with inventory purchases. That was the point at which conversations between the two companies changed, and Zappos soon agreed to be bought out for $850 million.

14. Amazon is so reliant on robots for order fulfillment that it purchased robotics and automation provider Kiva Systems for $775 million in 2012. As of early 2015, Amazon employed a fleet of 15,000 robots.

15. Pause for one second. Amazon just shipped 35 items in that time frame.

Amazon fulfillment center. Image source: Álvaro Ibáñez. Re-published under CC BY 2.0.

16. The company's fulfillment process has become so efficient that company executives believe it can ship up to 1.5 million items per day from just one fulfillment center .

17. Amazon isn't shy about its desire to squeeze out its shipping partners. Negotiations between its delivery and distribution partners have been fierce at times, and Amazon is slowly moving to take over shipping operations where possible. The company just purchased a fleet of trailers to move freight between fulfillment centers and is even in negotiations with Boeing to lease up to 20 767s.

18. Amazon is relentless in everything it does. Whether it's efficiency, undercutting competitors on price, or its frenetic work environment that has taken some knocks in the media, the company always has the pedal pushed to the floor. Actually, type www.relentless.com into your Web browser and see the result.

19. Amazon is well known for its low margins and meager cash flow. You might be surprised to hear that the company's actual cash flow is much lower than reported in financial statements. Chalk it up to (legal) accounting chicanery that determines when cash flows are recognized. For those wanting an accounting lesson on how this is possible, read this article from fellow Fool Timothy Green.

Google Is Afraid of Facebook's Search Ambitions

CIVIL WAR BETWEEN GOOGLE AND FACEBOOK

Image source: Robert Scoble.

The mobile Internet experience is vastly different from accessing the web on a desktop computer. People use apps instead of a browser, and that means the companies that own the most popular apps are at a significant advantage. According to Nielsen, Facebook(NASDAQ: FB) and Google own all eight of the most popular apps in the United States. But Facebook likely dominates total engagement compared to the Alphabet(NASDAQ: GOOG)(NASDAQ: GOOGL) company. Facebook management says its apps account for 20% of time spent on mobile.

Now, Facebook is encroaching on Google's territory, offering improved search functionality in its flagship app, and experimenting with search in Messenger, which has 700 million global users. Google is reportedly responding to Facebook's efforts with a messaging app of its own featuring a chat-powered search engine.

Can Google stop Facebook?

Google's planned mobile messaging app sounds like a direct response to Facebook's M. M is an AI-powered virtual assistant that can do anything from answer simple search queries to book travel accommodations. It's still limited to select users in the Bay area, but it represents yet another example of using Messenger as a platform.

As M rolls out to more users, Google could find itself losing out on search queries. The planned messaging app is aimed to prevent such an occurrence. But Google is missing out on the step that enabled Facebook to threaten Google's cash cow in the first place.

Google needs to build a network. People use a messaging app because all of their friends already use it. The network effect is quite apparent in the regional dominance of chat apps like WhatsApp, Messenger, WeChat, Line, and KakaoTalk.

Building a messaging service around several AI-powered chatbots is unlikely to draw the critical mass necessary to make a messaging app succeed. Google has failed to properly grow social networks in the past (see Google+), and its existing messaging apps, Hangouts and Messenger, have failed to attract a significant audience. Adding chatbots that answer simple searches won't change that.

 What Google could do instead

Google is certainly capable of rivaling Facebook when it comes to artificial intelligence. Last year, Google hired Geoffrey Hinton, one of the world's foremost researchers of deep learning neural networks, to help it design new AI algorithms. The move came just after Facebook hired NYU professor Yann LeCun to head up its AI research lab.

But, as mentioned, Google is missing the network. So, why not launch a chatbot on Facebook's platform? Facebook opened Messenger to third-party developers in March, enabling users to insert pictures, videos, and other media from other apps. Google could develop its AI-powered chatbot for Messenger.

Google has had no qualms developing software for platforms owned by competitors. It has dozens of apps for iOS, for example. But developing for Facebook's platform might not be in Google's best interest, as it cedes control and provides data to a company that uses the same monetization model as itself. Thus, Google is left to its own devices to create an app that people will use -- and use to search.

Mobile search growth

Earlier this year, Google announced it receives more searches on smartphones than it does on desktops. To be sure, the number of queries on mobile devices continues to rise, and those queries are largely Google's to lose. Facebook's M and its flagship app's search capabilities represent real threats, but development remains slow and limited. Google has time to figure out how to compete with Facebook to maintain its share of the mobile search market as it continues to grow.