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Epub did not exist until 2007, and I don't think that there was an epub reader until 2008. Sony only moved away from its proprietary format at the end of 2009 (although its readers may have also been able to read epub before then).
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At the time that Amazon bought Mobipocket, Mobi was THE dominant commercial eBook format, and was the format that pretty much everyone who read eBooks was using.
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Interesting. Thanks Andrew and Harry for the info.
So let me know if I got this right, because I may not have:
-2004: Amazon begins creating a device for a small, nascent market. Though not the first of its kind, they invest in the device and a restructuring of their company to support it to an extent that nobody had done previously.
-2005: Amazon purchases Mobipocket, which they had chosen as the primary format for the product they were developing (along with its supporting products such as mobile phone/PC software), ostensibly optimizing it for this format; a logical format choice at the time.
-2007, September: Two months prior to the Kindles's launch, epub is chosen as the IDFP standard.
-Amazon's venture is a success to the point that for all practical purposes it gives birth the market in its current state, and dominates.
-A handful of other companies capitalize on this success, but choose epub as as their primary format.
-Amazon is criticized for not adapting their device to a different format they claim is inferior for their product, made "standard" after the Kindle's development and then utilized by a small handful of competitors.