Behind the breakthrough that became the modern digital economy sits a company that started as a garage bookseller. Amazon, founded in Seattle in 1994, opened its online bookstore in 1995, and within a generation it grew into an e-commerce and cloud computing giant whose retail site reshaped how families shop and whose servers quietly power much of the internet. By 2024, a majority of its operating profits came not from selling things but from Amazon Web Services, its cloud division.
The human side of the early story is easy to forget. Jeff Bezos never saw the company as a bookstore; he saw a technology company selling books first, a idea many scoffed at and that earned a 1999 Barron’s cover story headlined “Amazon.bomb.” Amazon ran quarterly losses for years as it poured cash back into warehouses and delivery technology, and its first profit did not arrive until 2003, six years on from the 1997 initial public offering. The internal mantra, printed on employee T-shirts, was “Get big fast,” and it worked.
For families and independent retailers, the turning point came in 2000, when Amazon flung its store open to outside sellers. Small shops gained access to Amazon’s audience, and the Fulfillment by Amazon service took over storage, shipping and returns for a fee; an Amazon Lending arm lets qualified sellers borrow as much as $5 million. By 2023, third-party seller services accounted for roughly 60 percent of sales. Shoppers got their own institution in 2005, when Prime began offering free two-day shipping anywhere in the contiguous U.S. The membership grew to an estimated 200 million members in 19 countries by 2023, adding same-day delivery in more than 90 urban areas, flat monthly-fee medications through RxPass, and a Grubhub+ trial covering deliveries on orders over $12. As of 2024, a U.S. membership cost $14.99 a month or $139 a year.
Behind the cloud breakthrough sits a similar pattern: solve your own problem, then rent out the solution. AWS launched in 2002 with traffic data tools, and in 2006 it added Elastic Compute Cloud, renting raw processing power, and Simple Storage Service, renting data storage, all on a pay-as-you-go basis for businesses that could not or would not build their own infrastructure. The move essentially reinvented the computer infrastructure market. By 2023, AWS held roughly a third of the global cloud market, ahead of Microsoft’s Azure at 23 percent and Google Cloud at 11 percent, and while it historically produced 15 to 18 percent of Amazon’s sales, it yielded nearly 50 percent of operating income.
The growth was visible long before the AI boom. Back in 2021, Amazon’s revenue for the nine months to Sep. 30 was $332.4 billion, an increase of almost 28% from a year earlier, with cloud revenue jumping 36% and advertising-driven “other” revenue up 70%; net income rose 35% despite heavy pandemic safety spending.
The next chapter is artificial intelligence. Amazon launched its Bedrock generative AI platform in 2023, and in November 2025 OpenAI agreed to pay AWS $38 billion in a seven-year deal for capacity powered primarily by NVIDIA graphics-processing units, using Amazon’s global data center network to train and run advanced models, including agentic AI that completes tasks autonomously. Add the $13.7 billion Whole Foods acquisition in 2017 and the picture is complete: the company that began with books in a garage now sells groceries, streams films, and runs a large share of the plumbing underneath the digital economy.
Sources
- Amazon | E-commerce, Amazon Web Services, History, & Facts | Britannica Money
- Amazon Stock: Still a Buy? | The Motley Fool
