“If you can’t beat them, join them” – Amazon acquires Zappos for $920 million
There’s a reason that Amazon is the largest online retailer in the world, it realises that if a rival firm is too much of a threat, instead of competing with them, just buy them!
With news today that Amazon has dug deep for a US$928 million deal with online shoe retailer Zappos.com, it is clear that the Seattle-based company is desperate to corner the market in all retail sectors.
Despite starting off as online bookstore in 1995, Amazon quickly diversified and today sells music downloads, DVDs, clothes, electronics, furniture and clothes. As such, it has made a number of acquisitions over the years that have since their stocks soar and their profits rocket.
Along with today’s purchase of Zappos, notable purchases include:
Audible.com – the online audio-book provider was purchased by Amazon in 2008 for US$300 million.
AbeBooks/Shelfari – In August 2008, Amazon reverted back to its bookshop origins and purchased AbeBooks, a retailer of new, used and rare books. It also acquired the Seattle-based Shelfairi, a book based social network site. In addition, it got an additional stake in Shelfari’s competitor LibraryThing, which AbeBooks had previously purchased a 40 percent stake in, and total ownership of Bookfinder.com, Gojaba.com, and listing-management service FillZ, all owned by AbeBooks at the time of acquisition.
CD Now – the online music retailer was purchased in 2003.
Amazon has also purchased the popular Internet Movie Database and Box Office Mojo, a site that tracks movie sales in theatres effectively cornering the online movie site sector. Zappos, is also not its first clothing purchase; in February 2006, Amazon acquired the Wisconsin-based Shopbop, an online clothing and accessory store for women. A year later, Endless.com, a separate shoe firm was purchase with Fabric.com following a few months later.
2009 is so far, the second largest year for Amazon and similar deals with the company investing in seven firms. 1999 holds the highest amount with Amazon putting money into 14 businesses.
What becomes clear though, is Amazon policy to healthy competition – “If you can’t beat them, join them” and with their profits margins, do it by throwing large quantities of cash at them.
Reproduced from MeettheBoss