Why you should care about Amazon’s $500 million acquisition of Peebles
The deal was announced Friday.
It’s worth $500m to Amazon, which also owns Whole Foods and the e-commerce giant’s Prime service.
The move has raised eyebrows among tech titans, but also may not be surprising to consumers who have long been frustrated with online shopping, which is dominated by Amazon and other online retailers.
The company also is the world’s biggest seller of toys and other toys.
“It’s an enormous deal for Amazon, but it’s not going to be for us,” said Andrew Pimlott, an analyst with IHS.
“We believe Peebbles is a much more valuable and unique offering than other traditional e-tailers.”
Peebls was a hit for retailers like Amazon in the early days, and its e-books helped Amazon become a leading force in the ebooks market.
But the company has struggled to build a sustainable business, with revenue falling short of expectations and falling stock prices.
Last year, it sold more than $2bn in books, which fell short of the expected $3bn mark.
Last month, it announced plans to sell its own line of e-readers, but that effort has yet to materialize.
Amazon has made several acquisitions of companies that have been underperforming for years.
It bought the digital audio company Audio-Technica for $3.3bn last year and has been trying to take over the streaming music company Pandora for years, with success sometimes limited to short-term deals.
“The fact that Amazon bought Peeblis in a way that we’re not seeing here shows that Amazon has a serious strategy here,” said Ben Horowitz, an investment analyst at BTIG.
Amazon’s acquisition of a startup with a growing e-book and toys market has raised concerns among some analysts.
“They are going to have to do a lot of work and a lot more acquisitions to really get into the ereader and toys business,” said Eric Goldman, an associate professor at the University of Southern California.
Amazon said it is still committed to building out Peeblys e-reader business, and that it plans to bring in more experts to help it develop and deliver the product.
Amazon also said it will continue to sell a range of other products, including a new set of speakers for laptops.
“As part of our commitment to innovation, we are building Peeblers new suite of products, and we are excited to bring the company’s expertise and breadth of products to the new Amazon ereader,” said Amazon spokeswoman Julie Balsamo.
“Peeblots core expertise is built into its entire business, including the Peeblings new Kindle ereader, which we are pleased to announce will be the first to support Amazon’s Kindle e-reading platform.
We also expect to add new product categories as well, including more books and audio products.
We are also investing in new product development and will bring in experts as we move forward with this transformation.”
Mr Goldman said Amazon also has been spending on new hardware.
The new Kindle Ereader will support Amazon Prime, with a $100 discount, he said.
Amazon is also making big investments in new devices.
The Kindle E-reader, released in 2016, is the companys first e-toy, and Amazon has said it expects to sell more than 200 million devices in the coming year.
Amazon bought Motorola Mobility in 2016 and is moving aggressively to bring devices and services to the platform, as it has done with other products.
“Amazon has been investing heavily in hardware,” said Mr Goldman.
“At this point, they are doing everything possible to make the Kindle the best e-Reader and the most-anticipated e-ink device in the world.
They have invested in some of the best hardware and they have been working very closely with Apple on this.”
The deal also brings Amazon a new smartphone line, the Kindle X line, and a new television set.
The Amazon Echo smart speaker will be available in the US next year.
It has a built-in speaker that can play podcasts, and an Android app that lets users control music and other features.
The Echo has already been available in some markets, and will be released in Canada and Mexico next year, with Australia and Japan in 2019.