On a conference call with financial analysts last week, someone asked Amazon.com CEO Jeff Bezos whether other companies’ failures were the secret of his company’s success. All around Bezos, commerce is plummeting. Many rival retailers have reported their worst revenues in years; they’re cutting workers or shutting down entirely. Yet Amazon is thriving: It just had its best holiday season in company history, with profits up 9 percent over last year. Bezos offered a diplomatic answer: “In the long term, fortunately the markets that we operate in are very large markets, and there is room for lots of winners.”
But it’s Amazon’s retail business that’s the heart of its success. Over the last couple of years, the company’s retail arm has pursued a relentless expansion: It has launched a digital music store; added to its selection of Latin music, indie movies, and out-of-print books and CDs; and started selling new products ranging from fabric to motorcycles and ATVs. Just this week, Amazon launched a new PC video game store, selling hundreds of downloadable titles for less than $10 each.