In 1994, the vice president of a hedge fund, 30-year-old Jeff Bezos, quit his job at D. E. Shaw & Co. to start his own internet-based bookstore. Amazon launched a year later in July 1995, and within two months, the company sold books in all 50 states. Nonetheless, Bezo’s company was seen as a minor player in the publishing industry that was the home to heavyweights like Barnes and Noble and Borders. In May 1997, the company held its IPO, trading at $18 a share. Now shares of Amazon trade for roughly $3,400.
Bezos to Focus on Strategic Issues
On a recent Q4 earnings conference call, Amazon’s Chief Financial Officer Brian Olsavsky announced that Jeff Bezos would concentrate on strategic issues such as mergers and acquisitions in his new role at the company when he transitions to executive chairman. Amazon anticipates the move to happen in the fall of 2021. Amazon’s cloud computing leader Andy Jassy will take control of the company at that point.
“Jeff Bezos will be the Executive Chairman of the Board. He will be involved in many large, one-way-door issues, as we say, one-way doors, meaning, you know, the more important decisions, things like acquisitions, things like strategies, and going into grocery, and other things,” said Olsavsky during the Q&A section of the call with Wall Street analysts.
“So, Jeff’s always been involved with that, and that’s where we’ll keep his time focused on, or, he’ll keep his time focused on in his new role.”
Olsavsky said that Bezos’s job is a “super important role,” noting that “the Board is super active and important in Amazon’s success story.”
Amazon’s Significant Acquisitions
In June 2017, Amazon made its biggest purchase ever — the $13.7 billion acquisition of Whole Foods. Amazon has integrated Whole Foods into its local grocery delivery services like Prime Now, which significantly expanded its inventory to bring customers fresh foods directly from stores. The deal is 10 times larger than Amazon’s second-largest acquisition.
In July 2009, Amazon acquired Zappos in an all-stock deal estimated to be worth approximately $1.2 billion at the time. Amazon purchased all outstanding shares and warrants from Zappos for 10 million shares of Amazon’s common stock and provided $40 million in cash and restricted stock for the Zappos employees. The deal was closed on October 31, 2009.
Under Bezos, Amazon acquired Ring, a home security company for more than $1 billion in February 2018. The acquisition was designed to help bolster Amazon’s smart home offerings, and provided the company with a key outlet to expand its smart home gadgets built around its Alexa assistant.
In 2019, Amazon bought PillPack for an undisclosed sum (later revealed as $753 million). The company delivers most of the medications consumers can get from their local drugstore, but packaged in convenient packets so people will remember to take them, along with automatic refills and 24/7 customer support.
Top Amazon Acquisitions
Amazon has spent more than $20 billion on its top 10 acquisitions under Bezos. The list of its top 10 deals shows the company’s very diverse business interests:
- Computing hardware (Annapurna Labs);
- Media and Content (lovefilm, Twitch);
- Robotics (Kiva Systems);
- E-commerce (Souq, Quidsi, Zappos);
- Smart homes (Ring); and
- Healthcare (pillpack).