BEZOS is not a fool. He will steer AMZN to the promised land. Be patient: Amazon.com (Nasdaq: AMZN), announced
that it will take a 5% stake in online-car-buying company, Greenlight.com. As part of the
deal, Amazon will introduce Greenlight to its 16 million registered users, and in return
Amazon will receive $82.5 million worth of warrants that allow it to increase its stake in
Greenlight.com to 30%. All in all, it's a groovy deal for Amazon. If things go well for
Greenlight, Amazon can increase its stake. If not, Amazon can play down the partnership. As for the rumor of AMZN being strapped for cash why would they be laying out millions for companies like Kosmo.com................Investors led by Amazon.com are pumping $100
million of venture capital into Kozmo.com, a fast-growing, closely
held company that delivers movies, snacks and other items
purchased over the Internet.
The Wall Street Journal, citing people involved in the financing,
said yesterday that Kozmo.com is raising $60 million from
Seattle-based Amazon.com, which will acquire a 23 percent
stake, and nearly $30 million from an affiliate of Softbank of
Japan, an active backer of Internet businesses.
(and probably still make money).
Amazon already owns stakes in Ashford.com, Della.com, Gear.com, HomeGrocer.com,
Pets.com, and Drugstore.com. For each investment, Amazon apparently commanded an
attractive valuation and favorable conditions for itself, because it is the Top Dog and
companies are eager to be associated with it. The company is clearly in the power position
and is profiting.
Amazon's combined cash investment in the six firms we just listed is about $160 million,
and it is now estimated to be worth $1 billion to $1.5 billion, even though most of the
companies aren't yet public. (The values are estimated.) Today, Pets.com filed to go public.
Amazon owns 43% of Pets.com, so if Pets.com receives a strong (and lasting) reception
from the stock market, Amazon's investment portfolio will be padded handsomely.
" You may believe that partnering with Amazon is the kiss of life for any online commerce
firm, but so far that hasn't entirely proven true (unfortunately, we suppose, for Amazon
shareholders). Pets.com is ranked as the third most visited online pet store, not the leader.
Part of the reason for this may be that Amazon is less than aggressive (from what I've seen)
in "advertising" its partners on its flagship site. However, this is probably the right approach
for now.
Amazon is still attracting so many new customers each month that the company's focus
should be on getting those new customers acquainted with all of Amazon's offerings, first.
(The worst thing that a site can do with a new customer is immediately send them
elsewhere.) After new customer acquisition slows, there will plenty of opportunity to more
aggressively market partner sites. Plus, later in the game, there will be less risk of
"offending" regular customers with cross-promotion to outside sites.
On a side note, I wouldn't be surprised if Amazon has plans to eventually try to fully acquire
partner sites that do especially well, and then integrate them completely. " |
