Amazon's Grand Ambitions

NEW YORK (TheStreet) -- Amazon (AMZN) is a company with ambitions grander than most, including in some instances, Google (GOOG). If Jeff Bezos' letter to shareholders is any indication, those ambitions are about to grow.

In a letter to shareholders filed with the Securities and Exchange Commission, Bezos highlighted a number of initiatives, including Amazon Prime, Amazon Fresh expansion, the continued testing and rollout of drones, and the company's plans for faster and better delivery.

With regards to Amazon Prime, which recently raised its price to $99 a year, Bezos noted that more than 1 million members joined the shipping and content service in the third week of December, and there are now "tens of millions of Prime members worldwide." Amazon Prime customers are some of, if not the most, lucrative customers Amazon has and Bezos noted that.

"On a per customer basis, Prime members are ordering more items, across more categories, than ever before," Bezos said in the shareholder letter. He noted that there are more than 20 million eligible products for Amazon Prime, up from 1 million when the service launched nine years ago, and the company has been adding ways to make the service better, "including the Kindle Owners' Lending Library and Prime Instant Video." He said the company has "many ideas for how to make Prime even better."

On Prime Instant Video, Bezos noted there are more than 40,000 movies and TV episodes included in Amazon Prime, including TV seasons of Downton Abbey, Under the Dome, The Americans, Grimm, and several others. The company is also working hard to invest in original content, including Alpha House, starring John Goodman. "We like our approach and are replicating it with our recent rollout of PIV in both the UK and Germany," Bezos said. "The early customer response in those countries has been terrific, surpassing our expectations."

Bezos also touched on the recently announced Fire TV, which retails for $99 and is Amazon's answer to Apple (AAPL) TV, Google's Chromecast and Roku. "Not only is Fire TV the best way to watch Amazon's video offerings, it also embraces non-Amazon content services like Netflix, Hulu Plus, VEVO, WatchESPN, and many more," Bezos said, reiterating the fact Fire TV is an open ecosystem, a point Amazon hit hard during the announcement.

In addition to Prime Instant Video, Fire TV gives you instant access to more than 200,000 movies and TV episodes available a la carte, including new releases like Gravity, 12 Years a Slave, Dallas Buyers Club, Frozen, and more.  Fire TV also lets users play high-quality, inexpensive games on their TVs.

Bezos also touted Amazon's Appstore, which is now available in almost 200 countries, and has more than 200,000 apps and games available. Though that's a far cry from the number Apple and Google have in their respective app stores, Bezos noted Amazon is continuously working with developers to help them build their apps for Amazon's hardware:

"We introduced Appstore Developer Select, a marketing program that promotes new apps and games on Kindle Fire tablets and on Amazon's Mobile Ad Network. We created Analytics and A/B Testing services - free services that empower developers to track user engagement and optimize their apps for iOS, Android, and Fire OS. Also this year, we embraced HTML5 web app developers. They too can now offer their apps on Kindle Fire and through the Amazon Appstore," the CEO said.


Some of Amazon's bolder ambitions in recent years have included Amazon Fresh, its grocery delivery service, as well as Amazon Web Services and the company's fast delivery solutions, including drones.

Amazon Fresh, which costs $299 a year, allows customers to receive same-day and early morning delivery on fresh groceries, as well as over 500,000 items, including toys, electronics and household goods. Though it's available right now only in Seattle, San Francisco and Los Angeles, Bezos confirmed the goal is to expand it, "bringing this incredible service to more cities over time."

Amazon Web Services (AWS) is continuing to launch more services in features, adding 280 in 2013, up from 82 in 2011. There are now 10 AWS regions around the world, as Amazon's cloud computing segment continues to grow:

"We have 26 availability zones across regions and 51 edge locations for our content distribution network. The development teams work directly with customers and are empowered to design, build, and launch based on what they learn. We iterate continuously, and when a feature or enhancement is ready, we push it out and make it instantly available to all. This approach is fast, customer-centric, and efficient - it's allowed us to reduce prices more than 40 times in the past 8 years - and the teams have no plans to slow down," Amazon said.

Amazon has made no bones about trying to improve its delivery methods, first partnering with the U.S. Post Office for Sunday delivery. Bezos noted Amazon has also worked on improving the infrastructure in emerging markets, like India and China, with bike couriers. Then there's the issue of Amazon drones, something Bezos talked about on CBS' (CBS) 60 Minutes program in late 2013. "The Prime Air team is already flight testing our 5th and 6th generation aerial vehicles, and we are in the design phase on generations 7 and 8," he said.

If you thought that was enough, Amazon isn't done yet, using the company's internal experimentation platform called "Weblab" to constantly improve the company's Web site and products. In 2013, the company ran 1,976 Weblabs worldwide, up from 1,092 in 2012 and 546 in 2011.

Bezos and Amazon are serious about consistently improving the customer experience, and are showing no signs of slowing down.

To read the rest of Amazon's plans for the future and accomplishments, click here.
 
-- Written by Chris Ciaccia in New York

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