It might have escaped your attention lately, but big deals are back, and in a big way.
Coke, Facebook, Microsoft—some of the biggest names listed (or, soon-to-be-listed) on American markets—are plugging billions into deals like Monster Drinks, Instagram and Barnes & Noble to tackle developing verticals. Not Amazon, though. Over the last 24 months, Amazon has seen public markets increase its market capitalization by nearly $50 billion, all while spending approximately $2 billion on M&A.
In an era of the daily deal valuation skyrocketing, Amazon pretty much stuck to its knitting. While Google hurled mega-valuations at e-commerce companies like Groupon and Yelp, the Web 1.0 survivor did smaller deals to boost itself within its verticals—only stepping up to make its biggest acquisition in 18 months not in online shopping, but in robotic warehouses.
Amazon made its biggest spend (outside of the Kiva Systems transaction) to buy scale in the babies & soap space with Quidsi—and now, the company is taking Quidsi to more storefronts to keep customers engaged. The company tackled other smaller verticals, like TeachStreet for education products, music and movies online retailers and shopping deals like Woot and Quorus within the last two years, but other growth has come internally, from offerings like its BeautyBar.
It is as if Amazon is saying: “We’ll let niche sites and flash-in-the-pan retailers tethered to celebrities deal off boutique products. We’re set with our product mix.”
And what a mix it is. Best Browse customers can jockey with sales assistants by immediately pulling up items for a discount on their smartphones to determine who has the best offer, the brick-and-mortar retailer, or Amazon. Aforementioned Barnes & Noble needs Microsoft’s help because Amazon’s prices and shipping (and Kindle) are gnawing away at its top line from every angle. As for shopping sites, the market is so fragmented that—other than Groupon’s very public spectacle—it is often difficult to tell which smaller competitors are jockeying at the lead of the pack. That is, other than Amazon.
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