• Beginnings as an electronic book shop
• Constant expansion of business areas
• Amazon focuses specifically on high-growth industries
Online mail order as core business
According to its own statements, the online mail order company Amazon, as the market leader in internet trading, offers the world’s largest selection of books, CDs and films – and other product groups of all kinds can now also be found on the platform. Since it was founded by Jeff Bezos in 1994 as an electronic book shop, not only has the product range been steadily expanded, but so has the field of activity. The Amazon family has grown steadily through investments in existing companies and start-ups.
Expansion into other business areas
Today, a number of companies in the Amazon family are active in numerous and diverse business areas. While some subsidiaries and their relationship to the parent company are widely known, the affiliation of other companies to the group is sometimes surprising. Some, but not all, of the numerous Amazon subsidiaries are named below. Overall, Amazon’s activities and those of the associated subsidiaries can be divided into different business areas, including the e-commerce division.
However, the company’s activities in the field of e-commerce are not limited to the eponymous sales platform Amazon itself. With the takeover of the online shoe store Zappos in 2009 for 1.2 billion US dollars, Amazon expanded its sales business. The online retailer Shopbop has also been part of the Amazon family since 2006 and sells clothing and accessories independently of the parent company.
In grocery and retail, the company’s portfolio includes Whole Foods Market, a supermarket chain with more than 500 stores in the United States, Canada and the United Kingdom. Since being acquired by Amazon in 2016 for $13.4 billion, Whole Foods Market has been purposefully integrated into the Amazon family. For example, groceries can be delivered within two hours and Amazon Prime customers benefit from special offers.
With the online pharmacy PillPack, the Group operates in the area of health care. PillPack was added to the company’s portfolio in 2018 for a $1 billion acquisition price. PillPack offers its customers a special service: Instead of organizing several medicines and having to think about when to take them yourself, PillPack offers customers ready-made packs of their prescriptions. These are sorted by day, time and date. The cost of this service is covered by some insurance companies in the United States.
The company Bookfinder.com represents the Amazon family in the field of technology since 2005 and offers users a search engine dedicated to books. Goodreads, the largest database for book reviews in English-speaking countries, has also been part of the Amazon family since 2013. Amazon has invested $150 million in the company and directly integrated Goodreads into the Amazon family. This gives users the opportunity to write a review on Goodreads for books that they have read on the in-house e-book reader Kindle. The comics platform Comixology has also belonged to Amazon since 2014 and enables customers to read comic books online – an offer that is in great demand, especially given the success of the stories from the Marvel Universe in the recent past.
In addition to the Amazon Alexa product directly from the parent company, Ring, as a subsidiary of Amazon, offers various smart home technologies. The company Ring, which specializes primarily in security systems, was added to the company’s portfolio in 2018 for a takeover price of one billion US dollars. This gives Amazon the opportunity to be more present in households and to create a smart home system that can interact with other Amazon products such as Alexa or Echo devices.
Numerous members of the Amazon family are also active in the media and entertainment sector, to name just two heavyweights with the US film producer Metro Goldwyn Mayer (MGM) or Audible as an audio book provider. MGM has been part of the company’s portfolio since 2022. From its investment of 8.45 billion US dollars, Amazon promises to strengthen its in-house streaming service, which can be expanded to include MGM blockbuster series such as “James Bond” and “Rocky”. In 2008, the German Audible GmbH was bought by Amazon for 300 million US dollars. Audible offers audio book publishers in Germany, the USA, Great Britain, Italy and France a distribution platform and produces audio books and radio plays under the Audible Studios label, which are exclusively available to Audible customers. Amazon’s product portfolio in the area of media and entertainment is supplemented by the Internet Movie Database (IMDb), a database of films, television series and computer games as well as the people involved. The database has been operated by Amazon since 1998.
Investing in growth industries
Amazon has succeeded in making targeted investments in high-growth business areas at an early stage. In 2014, for example, the live streaming video portal Twitch was acquired for 970 million US dollars. An investment that has paid off thanks to the recent boom in the industry. More than 30 million people now use the platform regularly.
Amazon is also invested in numerous future-oriented technology fields. For example, in 2012, robotics company Kiva Systems was acquired for $775 million. Specialized robotic systems are being developed under the new name Amazon Robotics, which are intended to make the goods logistics of companies, including Amazon itself, more efficient. With the acquisition of autonomous vehicle maker Zoox in 2020 for more than $1.2 billion, Amazon is working on ways to use autonomous vehicles to deliver orders to customers.
Amazon subsidiaries are also active in other highly profitable business areas. For example, Amazon Web Services (AWS) is one of the largest cloud computing providers in the world.
N. Lorenz / Editor finanzen.net
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