Former Amazon employee James Marcus fell in love with the Internet bookseller's ethos - until it sold out and went public, diversifying into bras, cars and food, writes Brian Boyd.

Great Summer Deals! Get the Canon Ixus 500 Digital Camera for just £272.99, the 20-GB Apple iPod (lighter than two CD's, holds up to 5,000 songs!) for a mere £259.99, or how about the Yakumo YL2 multi-region DVD player at only £29.99 or Spider-Man 2: The Movie for £29.99. You have to look long and hard at Amazon.co.uk's home page for any mention of books, but somewhere off in a corner you'll find "Three paperbacks for just £12".

From its unlikely beginnings in a Seattle garage in 1995 as a quirky Internet bookseller that could track down even the most recherché of tomes and deliver them straight to your door, Amazon has now become the world's best-known e-commerce operation with over 40 million "active customer accounts". Books no longer represent the company's "core activity" as Amazon has expanded its operation to take a leading role in online music, DVD and video sales as well as opening up an online auction service and dedicated sites for the UK and Germany (with many more countries to come).

Just recently, it invested in an online pet shop, an online discount sports wear company and an online car retailer.

One of the company's first 60 employees - back when Amazon was solely dealing in books and had a vaguely "hippy" ethos - has just published an absorbing, if thoroughly disenchanted, account of life inside the organisation. James Marcus's Amazonia: five years at the epicentre of the dot.com juggernaut is a wry look at what happens when commerce meets culture and what the arrival of "MBAs, bean counters and PR operatives" means for any company that dares to carry Utopian baggage. He succeeds in bringing Amazon to book.

Amazon founder Jeff Bezos - "the Bill Gates of e-commerce" founded the company 10 years ago after realising that web traffic was increasing at 2,300 per cent a year. His first choice of web selling was music but realising that the music industry is dominated by five major record labels who wouldn't like his price-cutting ways, he soon turned to the book world.

By dealing directly with distributors and publishers and offering customers discounts of up to 40 per cent, Bezos got off to a roaring start as the growing Internet population suddenly realised they could order the complete works of Balzac at any time of day or night and have the package arrive to their home a few days later.

Bezos, a sort of nicer Richard Branson-type figure, actually believed it was possible for a bookseller to give customers fair, honest and objective opinions about books without compromising sales. To this end he established an "editorial" department, staffed by 25 editors and a small army of freelancers, who were to write honest and informed reviews of all the books in Amazon's catalogue.

The 55th person employed by the company was James Marcus - just two years after Marcus's arrival in 1996 the company had 8,000 employees.

Bezos's interview technique consisted of asking candidates questions such as "How many windows are there in New York City?" - depending on how the candidate handled the question, they would be hired.

Marcus, as a serious literary type, believed Amazon to be a cross between a cult shop and a literary magazine. His reviews were never altered, no matter how damning, and he was given all the freedom he liked to showcase more "literary" works on the company's home page - at the expense of big-selling "popular fiction".

As the company grew exponentially with thousands of new customers joining every week, Marcus was amazed to see no curtailment on his editorial judgments: "I need to emphasise what a remarkably free hand I was given," he writes, "here was a giant retail operation with a market capitalisation in the billions which was revolutionising an entire industry. A more traditional management with its eye fixed firmly on the bottom line might have ruled the home page by diktat.

"Instead I was invited to feature whatever I liked. And there was nothing more satisfying than nudging a non-commercial title into the limelight. This telegraphed certain qualities that Jeff wanted to see associated with the site. It made us seem eclectic, funny, smart and discriminating, minus any hint of snobbish superiority."

Amazon was truly a "public service" type of anti-business, run by book-lovers for book-lovers. Where else could you track down, as this journalist once did, a rare copy of The Most of S.J. Perleman and have it shipped across the Atlantic to you after what seemed like all the traditional bookshops in Western Europe had just said "Sorry, out of print" when beseeched about the title.

When Amazon went public in 1997 and rode the dotcom boom, Marcus detected a changed work-floor climate. By 1999 a share in the company initially valued at $18 was trading at more than $500. As a book reviewer on a salary of $44,000 a year, Marcus is shocked to realise that the stock options Bezos gave him when he joined the company are now worth (on paper) $9 million.

Despite his hypothetical fortune, he retains "a strange, neurotic vigilance about the purity of my literary enthusiasms . . . never 'making nice' to a book just to please somebody".

As the "MBAs, bean-counters and PR operatives" descend on the fantastically wealthy company, changes were made. The company devised a new piece of software, a "truncating widget" that would cut off book reviews after 150 words - unless the customer clicked to see the whole review. This left more space on the home page to advertise new products such as DVDs and CDs.

Amazon began to accept "co-operative advertising allowances" which Marcus alleges was little more than a form of "payola". The reviews themselves began to be outsourced - to readers. These "readers reviews", as everyone now knows, can be written by friends of the author or even by the authors themselves using a pseudonym.

"Personalisation" was introduced, meaning that Amazon's home page was replaced, if you were a registered customer, by your "own" page - where every click and twitch of the mouse is recorded and used to construct your own "store". Buy one speed metal, Goth-tinged music CD on Amazon now and you'll be besieged by offers of "More speed metal, Goth-tinged CDs" every time you revisit the site.

Once the company went public, "monetising those eyeballs" or squeezing the most money out of customers was the new ethic at Amazon he writes. It had unashamedly become: Sell, Sell, Sell.

Marcus recalls a meeting with one of the company's newly appointed managers who suggested that if someone came to the site looking for a book, they should be nudged into buying a DVD, or even a DVD player as well.

"What if the customer doesn't want a DVD or a DVD player?" asked Marcus.

"If you want to be a good corporate citizen", the manager replied, "you'll push the DVD player."

By the time Marcus became so disillusioned with the company's new direction that he had to leave (in 2001), the Internet bubble had burst and his stock options were only worth a fraction of their original price. Amazon did manage to see out the dotcom cash and is now a profitable company again.

For Marcus though, his "cult shop/literary magazine" had, he felt, become nothing more than a Wal-Mart.

Tellingly, at the end of the book, Marcus - who has now relocated to New York - recounts how he wants to give Jeff Bezos an advance manuscript of his book out of some form of lingering loyalty to the company. He reads that Bezos is in New York on Amazon business and makes his way down to meet his ex-boss. He finds Bezos in the company of the tennis player Anna Kournikova surrounded by photographers, reporters and bodyguards.

Kournikova has "designed" a shock-absorber sports bra, and Amazon is to be its exclusive American distributor . . .

Amazonia: Five Years At The Epicenter Of The Dot.Com Juggernaut by James Marcus is published by The New Press, £10.95.