It's hard enough for independent book stores to compete with megastore chains such as Barnes & Noble on terra firma, so how can they possibly do it in cyberspace? ``We're never going to have sofas; we're never going to have lattes,'' says Jeff Bezos, the founder of, the most popular bookstore on the Net.

So how does Amazon draw in hundreds of thousands of visitors each day? For one, bibliophiles can choose from a selection of 1.1 million books--more than five times the inventory of typical stores. It also discounts, up to 30% on best-sellers. But what really packs them in, and keeps them c2.08back, is a feeling of ``community'' that Bezos, a former hedge-fund manager, has created. People come not only to buy books but also to hang out. ``The No.1 thing we work on is making the store a fun place to be,'' Bezos says.

In lieu of sofas and steaming Joe, creates a special ambiance by having authors drop by electronically to post comments about their books--while readers are encouraged to post reviews, even if they're pans.

And Amazon caters to its cyberguests. Customers who fill out a profile are alerted via E-mail to new books on their favorite subjects or authors. Soon to come: forums where readers can discuss books with authors, and a chat capability that will let browsers in the science-fiction section, for example, talk to other sci-fi fans.

PLOWING BACK PROFITS. So far, the formula is working: Sales are jumping by 34% a month, with 44% coming from repeat customers. Bezos won't talk totals, but insiders peg the annual sales at $17 million. And Bezos was operating in the black just six months after hanging out his shingle in July, 1995. Soon after, though, he decided to plow back those earnings and grow as quickly as possible, before the inevitable competition from giants such as Barnes & Noble.

That's fine with Kleiner Perkins Caufield & Byers, the Bay area venture-capital firm that invested $8 million in Amazon--the single largest check KP has ever written. Says partner John Doerr: ``It's like Deep Throat said: `Follow the money.'''

By Kathy Rebello


Updated June 14, 1997 by bwwebmaster
Copyright 1996, Bloomberg L.P.
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