Seattle-based Amazon issued 717,316 shares of its common stock to buy the stake in Monterey, Calif.-based Altura International. Shares of Amazon closed at $6.97 Thursday.
Altura operates CatalogCity.com, and uses its software to help other companies run online stores. It also has deals with luxury goods and gift retailers including J. Jill, Hammacher Schlemmer, Harry & David and Ross-Simons.
As part of the deal, CatalogCity merchants will be featured on Amazon's site, and Amazon's products will be available through CatalogCity.
Amazon has a history of making investments in smaller dot-coms, but the deals have not always been fruitful. The company recently wrote off $41 million of its investments in Webvan, Sotheby's Holdings, WeddingChannel.com, Ashford and Drugstore.com. Webvan went out of business back in July.