Amazon.com, Inc., founded in 1984, has had a major impact on the e-commerce landscape in the past decade. Amazon is now one of the largest companies in the world, with a market cap of about $1.56 trillion and more than a million employees.
But with a market cap this huge, it’s easy to ask, “What does Amazon Own?” For starters, the e-commerce giant has over 40 fully owned subsidiaries, ranging from book publishing to organic food and clothing.
So, this article will cover some of the most important companies Amazon owns.
Overview
Amazon.com Inc. (AMZN) is one of the world’s largest corporations, a pioneer in e-commerce and cloud computing. As of July 22, 2022, its market capitalization is $1.25 trillion. Founder Jeff Bezos launched Amazon in 1994 as an online bookstore, but the company quickly expanded to become an e-commerce behemoth selling electronics, apparel, furniture, food, toys, and much more.
Amazon later expanded into cloud computing, video content, music streaming, and groceries. It also manufactures and sells consumer electronics like the Kindle and the Echo. Amazon reported net sales of $469.8 billion and net income of $33.4 billion for fiscal year 2021, up 22% and 56% from fiscal 2020, respectively.
Bezos will step down as Amazon’s CEO in July 2021, becoming the company’s executive chair. Andy Jassy succeeded him as CEO.
Jassy previously led Amazon Web Services, the company’s cloud computing division.
Amazon is still under investigation by antitrust authorities. The Federal Trade Commission (FTC) is conducting a broad antitrust investigation into its business practices. According to reports, the FTC’s antitrust investigation will focus on Amazon Web Services in December 2021.
By May 2022, the investigation looked into Amazon’s recently completed acquisition of MGM Holdings, Inc. and MGM’s Metro-Goldwyn-Mayer Studios Inc. This Hollywood studio produces and distributes feature films and television programming.
Five of Amazon’s most significant acquisitions are discussed in detail below. The company does not disclose how much profit or revenue each acquisition contributes. We’ve included MGM Holdings’ fiscal 2020 results.
What does Amazon own?
Whole Foods Market
Acquisition Cost: $13.7 billion. Date Acquired: August 28, 2017
This is an organic grocery store chain with over 500 locations in the United States, Canada, and the United Kingdom.
Whole Foods, founded in 1978 in Austin, Texas, as SaferWay, claims to be the only national grocer certified as organic by the United States Department of Agriculture (USDA).
When Amazon acquired Whole Foods was an independent company with a market cap of nearly $10 billion. It was ranked 176 on the 2017 Fortune 500 list.
Whole Foods was Amazon’s most expensive acquisition to date, and it marked the company’s first major foray into brick-and-mortar retailing. Since acquiring Whole Foods, Amazon has reduced prices on key food items at the chain, dubbed Whole Paycheck, and integrated the grocer’s customer offerings with its Prime service.
However, Amazon’s acquisition has taken a long time to pay off, as sales have stagnated.
Amazon’s physical store segment, which primarily consists of Whole Foods locations but also includes the company’s Amazon Fresh supermarkets and Amazon Go convenience stores, has seen its revenue decline since 2018, the first full year following Amazon’s Whole Foods acquisition.
Zappos
Acquisition Cost: $1.2 billion.
Date Acquired: November 2, 2009.
Zappos is an online retailer of footwear and apparel. It was founded in 1999 as shoesite.com but soon changed its name to a derivative of ‘Zapatos,’ the Spanish word for shoes.
Zappos increased over the next decade, remaining independent until Amazon agreed to acquire the company in July 2009 for 10 million shares of Amazon common stock and $40 million in cash and restricted stock units to Zappos employees.
The value of Amazon’s stock increased significantly between the deal’s announcement and closing, raising the acquisition price to $1.2 billion. While Amazon does not provide revenue figures for Zappos, Forbes reported in 2015 that Zappos generated more than $2 billion in revenue per year.
Zappos was Amazon’s first billion-dollar acquisition. A congressional report in 2020 cited internal Amazon correspondence indicating that the company viewed Zappos as a competitive threat before acquiring it.
Others have reported that Amazon launched its own Endless.com online footwear site in 2007 after Zappos rejected its initial buyout offer. It operated the business at a loss on terms Zappos would struggle to match before renewing the pursuit of its rival.
Endless was shut down by Amazon in 2012.
Kiva Systems
Acquisition Cost: $775 million.
Date Acquisition: March 19, 2012.
Kiva Systems, later renamed Amazon Robotics, was one of Amazon’s largest acquisitions. Founded in 2003, the company develops and manufactures robotic systems for various applications and was previously self-sufficient before being acquired by Amazon.
In contrast to its other acquisitions, Amazon has not made Kiva’s products available on its e-commerce platform. While Kiva’s role in Amazon’s strategy is unknown, its expertise in automated storage and retrieval systems could help the company’s logistics operations, which use thousands of robots to speed up product deliveries to customers.
PillPack
Acquisition Cost: $753 million
Date Acquisition: September 2018
PillPack is a 2013 online pharmacy. Amazon purchased the company in 2018 in an effort to expand into online prescriptions.
With the help of Amazon’s extensive delivery network, the company’s acquisition of PillPack enables it to ship prescription medications across the country overnight. PillPack, like Whole Foods and Zappos, has kept its brand under Amazon’s control.
Twitch Interactive
Acquisition Cost: $970 million.
Date Acquisition: September 25, 2014.
Twitch Interactive launched its popular video live-streaming platform Twitch in 2011. It had 55 million unique visitors in July 2014, just before Amazon bought it.
Twitch is especially popular among video gamers and has aided Amazon’s expansion into video games and streaming.
MGM Holdings Inc.
Acquisition Date: March 17, 2022 Annual revenue (2020): $1.5 billion Annual net income (2020): $33.2 million
MGM, a film and television production and distribution company, stands for Metro-Goldwyn-Mayer. Metro Pictures Corp., Goldwyn Pictures, and Louis B. Mayer Productions merged to form the company in 1924. Today, the company owns an extensive film and television content library, including the James Bond and Rocky franchises.
Amazon’s second-largest acquisition, trailing only Whole Foods, closed after the deadline for prior regulatory review expired, allowing the acquisition to proceed even as the FTC continued to investigate it on antitrust grounds. An agency representative stated at the time that the agency may still choose to challenge the deal if the review finds legal grounds.
The MGM acquisition bolstered Amazon’s Prime Video streaming service, increasing its content inventory. The agreement positions Amazon for continued competition with media and streaming behemoths Netflix Inc. (NFLX), Walt Disney Co. (DIS), Comcast Corp. (CMCSA) unit NBCUniversal, Paramount Global (PARA), and Warner Bros. Discovery Inc. (WBD), the new media company formed by the merger of Discovery Inc. and AT&T Inc.’s (T) WarnerMedia unit.
Audible
Audible is the world’s most popular audiobook platform and the largest one, with over 200,000 unique titles in its library. Amazon paid $300 million for Audible in 2008, which turned out to be a wise investment. Audible is consistently one of Amazon’s most profitable subsidiaries.
Goodreads
Goodreads is a social cataloging website that allows users to catalog and review books they’ve read and recommend books to one another. Users can also form groups to discuss books or related topics.
Goodreads was founded in 2006 and was acquired by Amazon in 2013 for an undisclosed sum. When a user discovers a book on Goodreads, they can now buy it as an e-book or audiobook from Amazon Kindle or Audible.
IMDb
IMDb (Internet Movie Database) is an online database of information about films and television shows. This information includes:
- Plot summaries
- Cast lists
- Reviews
- Parent guides
- Technical specs
- Trivia
IMDb was founded in 1990. Then, in 1998, it became one of Amazon’s first acquisitions.
Amazon paid $55 million for IMDb and two other companies (Telebook and Bookpages, both of which no longer exist). Since then, IMDb has remained one of Amazon’s most popular subsidiaries.
Ring
This is a home security/smart home company that was founded in 2013. Ring, best known for its WiFi-powered Ring Video Doorbell, also manufactures other home security devices such as the Ring Alarm and Always Home Camera.
Amazon purchased Ring in 2018 for an estimated $1.2-$1.8 billion.
Lab126
Lab126 is Amazon’s subsidiary that develops and manufactures its branded lines of integrated consumer electronics, such as the Kindle, Echo, and Fire TV. Rather than acquiring an existing company, Amazon founded Lab126 and has owned it since the beginning.
Amazon Fresh
Amazon, like Lab126, launched Amazon Fresh. It is a grocery delivery service that is available in most major U.S. cities as well as several international cities, including:
- Berlin
- Hamburg
- London
- Milan
- Munich
- Rome
- Tokyo
Customers can order groceries and non-food household items like paper towels from Amazon Fresh. Amazon Fresh then delivers the items to the customer’s home the same day or the next day, depending on when they place their order.
Although Amazon Fresh and Whole Foods are both Amazon subsidiaries, they operate independently of one another.
AbeBooks
AbeBooks is an online marketplace that sells books, fine art, and collectibles from sellers in over 50 countries. It was founded in 1995 in Victoria, British Columbia, Canada, and quickly became known as a premier source for rare and out-of-print books. Amazon paid an estimated $90-$120 million for AbeBooks in 2008.
Woot
Woot (often stylized as Woot!) is an online retailer based near Dallas, Texas. It sells products in a wide range of categories, including:
- Household items
- Electronics
- Apparel
- Sports and outdoors
- Tools and gardening
All products are sold at discounted prices, with deals changing daily or until inventory runs out.
Woot was founded in 2004 and purchased by Amazon in 2010 for $110 million.
What are Amazon’s Subsidiaries?
As mentioned above, there are numerous Amazon subsidiaries, including:
- MGM Holdings (including MGM Studios)
- Whole Foods
- Zappos Ring Shopbop
- Twitch
- IMDb
- Goodreads
- Woot
- AbeBooks
- PillPack
- Goodthreads
MGM Holdings, the parent company of the famed Metro-Goldwyn-Mayer Studios, is one of Amazon’s most recent subsidiaries. Amazon purchased MGM for $8.45 billion in 2021. MGM was founded in 1924, and some of its most famous productions include the James Bond and Rocky franchises and influential classics such as The Wizard of Oz and Gone With the Wind. It is regarded as one of the world’s most well-known film production companies.
Amazon also paid $13.7 billion for the popular supermarket chain Whole Foods in 2017. The company employs an estimated 91,000 people and operates over 500 stores in the United States, Canada, and the United Kingdom. Whole Foods was founded in 1980 in Austin, Texas, with a staff of 19 people.
Amazon purchased Twitch, a popular live-streaming platform, in 2014. The company was founded in 2011 and primarily focuses on video game and e-sports streaming. Some of the most popular games streamed on the service are Fortnite, League of Legends, Dota 2, Hearthstone, and Overwatch.
What Amazon companies had the highest acquisition costs?
These are the Amazon businesses with the highest acquisition costs:
- Whole Foods Market (2017): $13,700,000,000
- MGM Holdings (2021): $8,450,000,000
- Zoox (2020): $1,200,000,000
- Twitch Interactive (2014): $970,000,000
- Ring (2018): $839,000,000
- Kiva Systems (2012): $775,000,000
- PillPack (2018): $753,000,000
The Amazon Story
Jeff Bezos founded Amazon in 1994 in Bellevue, Washington. MacKenzie Scott, Bezos’s former wife, was also instrumental in getting Amazon up and running. It began as an online book marketplace but has since expanded to many products. Amazon’s businesses now include retail products, cloud computing services, supermarket chains, technology devices, etc.
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