At the age of 30, Jeff Bezos left a high paying job on Wall Street in 1994 to start an online bookstore called Amazon.com Inc. (AMZN). It turns out that he made the right decision. Bezos became the wealthiest person in the world in 2017, and Amazon is much more than a book retailer. As a Fortune 100 company, Amazon’s brand is known throughout the world as the first destination to buy almost anything online. Amazon’s market capitalization briefly surpassed Microsoft (MSFT) in January 2019, making it the most valuable company in the United States.
Hundreds of millions of people around the world know Amazon as the "everything store.” However, the company is a large conglomerate of both related and unrelated businesses. Since its initial public offering (IPO) in 1997, Amazon has acquired several smaller companies. Here is an overview of seven subsidiary companies owned and operated by Amazon.
As the largest producer and retailer of audiobooks in the United States, Audible Inc. is one of Amazon's most well-known businesses. Following a $300 million acquisition in 2008, the company became a subsidiary of Amazon. In addition to selling audiobooks, Audible provides its customers with downloadable audio versions of newspapers, magazines, and radio programs.
CreateSpace is an Amazon subsidiary that operates in the content publishing and distribution industry. The company offers a self-publishing platform that allows independent filmmakers, musicians, and authors to publish and distribute their work. That makes it much easier for creative professionals to bring their work to market without spending large sums of money. The CreateSpace website also provides a library of free articles on many publishing-related topics.
CreateSpace came about as a result of two acquisitions that Amazon made in 2005. Amazon bought on-demand independent film distributor CustomFlix and on-demand book publisher BookSurge. Both companies were later merged in 2009 to form what is now CreateSpace.
With more than 90 million registered users, Goodreads is a thriving online community of book readers from around the world. The website allows users to discover new titles based on what they have read in the past. It also allows its members to give reviews on books and share their reading lists with others. Many self-published authors use Goodreads as a medium to promote their work and engage with their readers. Goodreads began in 2007, and Amazon purchased the website in 2013.
The Internet Movie Database, better known as IMDb, is an online database that provides information on television shows, movies, actors, and producers. Amazon bought the company in 1998 from the founder, Col Needham, who continued to serve as IMDb's CEO for more than 20 years.
After the acquisition, Amazon used IMDb as a medium to promote some of its movie-related products, including DVDs and videotapes. Ad revenue and strategic licensing deals are both significant contributors to IMDb's overall income. The company also makes money with its subscription service IMDbPro, which allows subscribers to network with entertainment professionals. In 2019, IMDb started a free ad-supported streaming video service called Freedive.
Whole Foods was Amazon's largest buy ever at the time the acquisition took place in 2017. Amazon paid $13.7 billion for the organic food retailer and gained access to its brick and mortar presence.
While Whole Foods continues to emphasize the healthy fare that made it successful, Amazon's acquisition brought some changes. Amazon Lockers began to show up in Whole Foods stores. While the lockers offered Amazon customers a secure place for deliveries, they also got more customers into the stores. More importantly, Whole Foods gives Amazon a way to deliver fresh foods, which is an area where Amazon has struggled in the past.
Amazon acquired the popular online discount retailer Woot in 2010. As its "One Day, One Deal" slogan suggests, Woot provides its customers with discounted prices on a particular product each day. These products come from a wide range of categories, including consumer electronics, clothing, and even wine.
When Nick Swinmurn couldn't find a particular shoe that he wanted in 1999, he decided to start an online shoe store on his own. That company was Zappos. Without spending much money on advertisements, Swinmurn grew his customer base through word-of-mouth. Zappos eventually became one of the world's largest online shoe retailers.
In 2008, Zappos reached 1 billion dollars in annual revenue. One year after achieving this milestone, Amazon acquired the company for $1.2 billion. Since then, both companies have continued to operate as separate entities. Zappos retained its unusual holacratic organizational structure after the acquisition.
The Bottom Line
With a market capitalization of more than $800 billion, Amazon was one of the largest companies in the world in 2019. Competitors like Target and Walmart barely maintain their positions in comparison. In addition to being the world's largest online retailer, Amazon was a diversified conglomerate with holdings operating in several sectors. These businesses included retail, consumer goods, publishing, and media. Amazon made its founder, Jeff Bezos, the wealthiest person on the planet.