gap."

= Amazon in Europe

The European presence of Amazon began in October 1998, with the creation of two subsidiaries in Germany and in United Kingdom.

In August 2000, Amazon had 1.8 million customers in U.K., 1.2 million customers in Germany, and less than 1 million customers in France. Amazon opened its third subsidiary, Amazon France, with books, music, DVDs and videos - software and video games were added later, in June 2001 - and a 48-hour delivery. At the time, online sales represented only 0.5% of the book market in France, against 5.4% in the United States.

The opening of Amazon France was announced at the last minute, on August 23, 2000, after months of secrecy surrounding the next "American cultural invasion". The French subsidiary opened in Guyancourt, in the suburbs of Paris, with 100 employees - some of them trained in the U.S. headquarters in Seattle - for administration, technical services, and marketing. The distribution service opened in Boigny-sur-Bionne, near Orleans, a town in the south of Paris. The customer service landed in The Hague, Netherlands, because Amazon was expecting to broaden its European network.

Amazon France had four competitors: Fnac.com, Alapage,
Chapitre.com, and BOL.fr.

Fnac.com was the online branch of Fnac, a network of
"traditional" bookstores spread throughout France and other
European countries, and run by the group Pinault-Printemps-
Redoute.

Alapage was an online bookstore founded in 1996 by Patrice Magnard, before being bought by France Telecom in September 1999. Alapage became a subsidiary of Wanadoo, the internet service provider of France Telecom, in July 2000.

Chapitre.com was an independent online bookstore, created in 1997 by Juan Pirlot de Corbion.

BOL.fr was the French subsidiary of BOL.com (BOL: Bertelsmann On Line), launched in August 1999 by Bertelsmann, a German media giant, in partnership with Vivendi, a French multinational company.

Unlike their counterparts in the U.S. and in U.K., where book prices were free, French online bookstores couldn't offer significant bargains. A French law - the Lang law - regulated prices. (Jacques Lang was the ministry of culture who fathered the law to protect independent bookstores.) The 5% discount allowed by law for both traditional and online bookstores was offering little latitude to Amazon.fr, Fnac.com, and the likes, who were nevertheless optimistic about the prospects offered by the French-language international market. A significant number of orders was already coming from abroad, with 10% of orders for Fnac.com as early as 1997.

Interviewed by AFP (Agence France-Presse) on the Lang Law and the meager 5% discount allowed for book prices, Denis Terrien, president of Amazon France (until May 2001), explained in August 2000: "Our experience in Germany, where book prices are also regulated, shows that prices are not the main factor for our customers to purchase books at Amazon. The main factor resides in the additional services we provide. We offer a whole bunch of services, beginning with a large choice in our catalog - we sell all the French cultural products. We have a powerful search engine. As for music, our site offers the only catalog searchable by song title. In addition to the editorial content of our site, which ranges from the one of a traditional bookstore to the one of a magazine, we have a customer service 24h/24 7days/7, something unique in the French market. Finally, an additional specificity of Amazon is our commitment for a fast delivery. We aim to have more than 90% of our products in stock (at our storage facility)."

Amazon's economic model was already admired by many in Europe, but could hardly be considered a model too for staff management, with short-term labor contracts, low wages, and poor working conditions.

Despite the secrecy surrounding the working conditions of the European staff, problems began to filter. In November 2000, the Prewitt Organizing Fund and the French union SUD-PTT Loire Atlantique launched an awareness campaign among the employees of Amazon France, after meeting with a group of 50 employees in the distribution center of Boigny-sur-Bionne. In a statement following the meeting, SUD-PTT denounced "degraded working conditions, flexible schedules, short-term labor contracts in periods of flux, low wages, and minimal social guarantees". Similar action was conducted in Germany and in U.K. Patrick Moran, head of the Prewitt Organizing Fund, founded an employee organization under the name of Alliance of New Economy Workers. In response, Amazon sent internal memos to its employees, stressing the pointlessness of unions within the company.

At the end of January 2001, Amazon, which employed 1,800 people in Europe, announced a 15% reduction of its European staff. It also closed its customer service center in The Hague (Netherlands). Its 240 employees were offered to work in one of the two other European customer service centers, in Slough (United Kingdom) and in Regensberg (Germany).

= Amazon worldwide

The second group of foreign clients - after European customers - was in Japan. In July 2000, during an international symposium on information technology in Tokyo, Jeff Bezos announced his intention to launch Amazon Japan in the near future. He insisted on the high potential of the Japanese market, with expensive real estate affecting the prices of goods and services and, as a result, online shopping being more convenient than traditional shopping. High population density would mean easy and cheap home deliveries.

A Japanese call center opened in August 2000 in Sapporo, a city on the Hokkaido island. Amazon Japan opened three months later, in November 2000, as the fourth subsidiary of Amazon and first non-European subsidiary, with a catalog of 1.1 million titles in Japanese and 600,000 titles in English. To reduce delivery times to 24 to 48 hours instead of six weeks for books published in the U.S., a large distribution center (15,800 m2) was created in Ichikawa, a town in the east of Tokyo.

In November 2000, Amazon had 7,500 employees, a catalog of 28 million items, and 23 million clients worldwide. It opened its digital library with 1,000 ebooks, and the promise of many more titles for soon.

Amazon also began focusing on the French-language market in Canada. It hired staff knowing the language and the market, to be able to offer French-language books, music and films (VHS and DVD) in a Canadian subsidiary. Amazon Canada, the fifth subsidiary of the company, was finally launched in June 2002 with a bilingual (English, French) website.

Surprisingly, even for the marketing of a main online bookstore, paper was not dead. For two consecutive years, in 1999 and 2000, Amazon sent a print catalog to its customers (10 million in 2000) before the holiday season.

2001 marked a turning point for the company, with the need to address the internet bubble affecting the "new" economy and so many companies. Following a deficit for the fourth quarter 2000, Amazon reduced its workforce by 15% in January 2001. 1,300 employees lost their jobs in the U.S. 270 employees lost their jobs in Europe. Jeff Bezos decided to diversify the products sold online, and to sell not only books, videos, CDs and software, but also health care products, toys, electronics, kitchen utensils, and garden tools. In November 2001, cultural products - books, CDs and videos - represented only 58% of sales, the total of which were US $4 billion, with 29 million customers.

The company was beneficiary for the first time in the third quarter 2003.

In October 2003, Amazon launched a full text search