1993, Bezos decided to establish an online bookstore.[44] He left his job at D. E. Shaw and founded Amazon in his garage on July 5, 1994, after writing its business plan on a cross-country drive from New York City to Seattle.[45][46] Prior to settling on Seattle, Bezos had investigated setting up his company at an Indian reservation near San Francisco in order to avoid paying taxes.[47] Bezos initially named his new company Cadabra but later changed the name to Amazon after the Amazon River in South America, in part because the name begins with the letter A, which is at the beginning of the alphabet.[48] He accepted an estimated $300,000 from his parents and invested in Amazon.[46] He warned many early investors that there was a 70% chance that Amazon would fail or go bankrupt.[49] Although Amazon was originally an online bookstore, Bezos had always planned to expand to other products.[43][48] Three years after Bezos founded Amazon, he took it public with an initial public offering (IPO).[50] In response to critical reports from Fortune and Barron's, Bezos maintained that the growth of the Internet would overtake competition from larger book retailers such as Borders and Barnes & Noble.[48]

In 1998, Bezos diversified into the online sale of music and video, and by the end of the year he had expanded the company's products to include a variety of other consumer goods.[48] Bezos used the $54 million raised during the company's 1997 equity offering to finance aggressive acquisition of smaller competitors.[48] In 2000, Bezos borrowed $2 billion from banks, as its cash balances dipped to only $350 million.[51] In 2002, Bezos led Amazon to launch Amazon Web Services, which compiled data from weather channels and website traffic.[48] In late 2002, rapid spending from Amazon caused it financial distress when revenues stagnated.[52] After the company nearly went bankrupt, he closed distribution centers and laid off 14% of the Amazon workforce.[51] In 2003, Amazon rebounded from financial instability and turned a profit of $400 million.[53][failed verification] In November 2007, Bezos launched the Amazon Kindle.[54] According to a 2008 Time profile, Bezos wished to create a device that allowed a "flow state" in reading similar to the experience of video games.[55] In 2013, Bezos secured a $600 million contract with the Central Intelligence Agency (CIA) on behalf of Amazon Web Services.[56] In October of that year, Amazon was recognized as the largest online shopping retailer in the world.[57]