Amazon.com, Inc. (AMZN) is a leader in e-commerce and cloud computing, and one of the largest companies in the world. It has a market capitalization as of this writing of $949.8 billion. The company was launched by founder Jeff Bezos in 1994 as an online bookstore, but has diversified into an e-commerce giant that sells virtually everything, including electronics, apparel, furniture, food, toys, and much more. In addition to e-commerce, Amazon's revenue comes from subscription services, cloud computing services, Whole Foods grocery sales, and other areas. It also builds and sells its own consumer electronics such as the Amazon Kindle and Amazon Echo. For FY 2019, Amazon reported net sales of $280.5 billion and net income of $11.6 billion.
Below, we look in detail at 5 of Amazon's most important acquisitions. The company does not provide a breakdown of how much profit or revenue each acquisition currently contributes to Amazon.
Whole Foods Market
- Type of Business: Organic grocery store
- Acquisition price: $13.7 billion
- Date it was purchased: August 28, 2017
Whole Foods is a prominent grocery store chain with the distinction of being the only USDA-Certified Organic grocer in the United States. The company was founded in 1978 as SaferWay. At the time of its acquisition by Amazon, Whole Foods was an independent company with a market cap of almost $10 billion. It was ranked #176 in the 2017 Fortune 500 list. Since then, Amazon has lowered prices on key food items and has integrated its Prime service into the Whole Foods customer experience.
Whole Foods is Amazon's biggest reported acquisition in terms of price, and it also was Amazon's first major step into bricks-and-mortar retailing. Whole Foods has hundreds of stores.
Amazon has combined the ordering sites for is free delivery service, Amazon Fresh, and Whole Foods Market, making it a simple matter for customers to place their orders. Prime members also receive free delivery when ordering from Whole Foods.
- Type of Business: Footwear and apparel retailer
- Acquisition price: $1.2 billion
- Date it was purchased: November 2, 2009
Zappos is the leading footwear and apparel website in the world. The name comes from the word zapatos, which means "shoes" in Spanish. The company was founded in 1999 and grew rapidly, remaining independent until the time of its acquisition by Amazon in 2009. The company is famed for its customer service, and its CEO Tony Hsieh released a bestseller in 2010 that details his management style, called Delivering Happiness. While Amazon does not provide revenue figures on Zappos, Forbes indicated in 2015 that it generated more than $2 billion in revenue annually.
Zappos stands out among Amazon's many acquisitions because it was one of the company's first major expansions into a retail area beyond books.
- Type of Business: Robotics
- Acquisition price: $775 million
- Date it was purchased: March 19, 2012
Kiva Systems, now rebranded as Amazon Robotics, was one of Amazon's largest purchases at the time of its acquisition in 2012. Founded in 2003, the company develops and manufactures robotic systems for a variety of uses and was independent at the time of its acquisition. Compared with Amazon's other deals, Kiva Systems is unique. Amazon has not integrated Kiva's products into its platform of e-commerce offerings in the way it has done with other acquisitions. While Kiva's role is unclear, its specialization in automated storage and retrieval systems could provide major support to Amazon's logistics operations, which include thousands of robots that aid the company's delivery services.
- Type of Business: Online pharmacy
- Acquisition price: $753 million
- Date it was purchased: June 28, 2018
PillPack, Inc., is an online pharmacy company that was founded in 2013. Amazon acquired the company in 2018 in a move that was seen as an effort to expand into the online prescription business. Aided by Amazon's extensive delivery network, the company's purchase of PillPack allows it to ship prescription medications overnight to locations across the country. Like Amazon's purchases of Whole Foods and Zappos, PillPack has retained its brand within Amazon's larger umbrella of subsidiaries.
- Type of Business: Live-streaming video
- Acquisition price: $970 million
- Date it was purchased: August 25, 2014
Twitch Interactive's popular live-streaming video platform, called Twitch, was launched in 2011. In July of 2014, just prior to Amazon's acquisition, Twitch had 55 million unique visitors. This platform is popular among video game enthusiasts in particular and aided Amazon's expansion into the video game and streaming industries.