Amazon.com: Gadgets, gizmos overtake media sales

Sure, Amazon.com started as an online bookstore, but before long, it added movies, music, video games, electronics, apparel, toys, furniture, hardware and cosmetics.

Today, Amazon offers a seemingly endless array of products across dozens of categories, and yet the most common misconception people have about it is that it only sells books, Chief Executive Jeff Bezos told Consumer Reports magazine in May.

"People are busy. When they come to Amazon, in many cases, they're on a mission. They type in a search term. Bam, they hit the thing," Bezos said. "They buy it, and then they go back to their family or children or whatever is important to them.

"So we're not that important to people," he added. "We look at it and we're like, 'How come you've never bought a digital camera from us?' "

Still, the Seattle Internet giant manages to sell plenty else besides books. Last year, Amazon's media business took in $15 billion, generating less than half of its total sales, while electronics and other general merchandise, at $18-plus billion, accounted for more than half.

Combined, Amazon's sales shot up 40 percent to $34 billion in 2010, solidifying its place as the world's dominant online retailer.

So far in 2011, Amazon continues to promote its Kindle e-reader amid speculation that it's preparing to introduce a tablet computer to take on Apple's multipurpose iPad2.

It also has diversified its digital-media business by offering unlimited video streaming as part of an AmazonPrime membership, selling applications for mobile devices that run on Google's Android operating system, and launching cloud-based music storage.

To handle all the other stuff it sells, Amazon built 13 new warehouses last year and plans at least 10 additional warehouses this year.

Meanwhile, it collects sales taxes in only a handful of states where it does business.

Traditional retailers such as Wal-Mart Stores aim to put an end to what they say is an unfair price advantage, raising the likelihood of an eventual showdown in Congress.

"The right place to fix this is with federal legislation," Bezos said. "I don't think our customers would say, 'Why don't you optionally collect sales tax? I know you're not required to, but oh, go ahead.' "

Amy Martinez: 206-464-2923 or amartinez@seattletimes.com