Source: eCommerceTimes
In the late 1990s, Amazon became notorious for its disastrous Internet investments. Its voracious appetite for buying stakes in other retailers — such as Pets.com, Kozmo.com and Bellevue, Washington-based HomeGrocer.com — carried forward a lesson justified by its successful Internet launch in 1995: Being first on the scene was equivalent to being the scene.
One by one, those companies crumpled. Still, investment opportunities — particularly in technologies that are key to Amazon’s growth, such as search — abound. And some believe that to retain its position as an Internet titan, Amazon must become more aggressive with its acquisitions strategy.
“These acquisitions [by eBay and Yahoo] are putting activity pressure on other cash-rich companies that are near their space, like an Amazon,” said Kevin Cable, executive vice president of Cascadia Capital, a boutique Seattle, Washington investment bank. “The software industry is consolidating. Period. The online industry is consolidating. Period.”
Cable believes that Amazon and other large Internet companies could take advantage of “the broad-based availability of midmarket companies coming out, because of a lousy IPO market.”
But Amazon spokeswoman Patty Smith emphasized the company’s internal horsepower over its potential acquisitions: “We have thousands of software development engineers in the U.S. and abroad constantly innovating and introducing new features — whether personalization technology or other features on the site that make it easy for you to find and purchase what you are looking for.”
Amazon hasn’t disclosed the cost of its three comparatively minor purchases so far this year — BookSurge, Mobipocket.com and CustomFlix — but they are all subtle additions, not earthshaking deals like Yahoo’s $1 billion bet on Alibaba.com, a Chinese e-commerce company.