The online book and music retailer says it is acquiring two Internet companies to strengthen and broaden the services available at its Web site.
In separate deals, Amazon will acquire PlanetAll, a Web-based personal information manager, and online virtual database maker Junglee. Amazon will acquire 100 percent of the outstanding shares of Junglee and PlanetAll in exchange for equity valued at approximately $280 million.
PlanetAll provides a Web-based address book, calendar, and reminder service compatible with most organizers, including 3Com's Palm Pilot. The service, started in late 1996, currently has 1.5 millions members.
"PlanetAll is the most innovative use of the Internet I've seen," said Amazon's founder and CEO Jeff Bezos. "It's simply a breakthrough in doing something as fundamental and important as staying in touch."
Junglee, founded in 1996, developed a virtual database technology that makes it easier to search for items. Junglee carries more than 15 million items in the Junglee Shopping Guide and more than 90,000 job listings in its Job Canopy. Junglee's customers and partners include Yahoo, Compaq, and Snap. (Snap is a division of CNET: The Computer Network, publisher of News.com.)
"This is a significant opportunity for all of us at Junglee to extend our technology well beyond our current base," said Ram Shriram, president and COO of Junglee. "With Amazon.com, we can address the larger challenges of e-commerce sooner--and on a broader scale--than we could have done alone."
Junglee's search technology currently lists retrieves information on many of Amazon,com's competitors, including Barnes and Noble, when searching for books, and Bezos said he has no plans to change what information is given out by the database.
"We want to improve customer experience, and to the degree that people want comparison shopping, they'll get comparison shopping," Bezos said, pointing out that Junglee will help users find more than books and music. "To the degree they want to find a broader array of things, we will help them with the discovery."
When asked about further acquisitions that would fit into Amazon,com's business strategy, Bezos said: "[We] have a lot of ideas, but are not necessarily talking about more acquisitions." He declined to comment on his ideas for the expanding retail site.
While the acquisition of Junglee is a move to make Amazon's shopping experience more efficient for its customers, the company's deal with PlanetAll is an attempt to bring its books and music retail site a step closer to portal sites. Yahoo, Excite, and other portals provide free extras, ranging from email to chat groups, in hope of drawing repeat and new visitors. More visits to a site make the sale of advertising spots easier.
"PlanetAll puts more on their site than just books," said Terry McCrary, senior vice president of research with investment banking firm Waldron & Company. "It broadens the offering on Amazon's site and gives you another reason to go there."
But Bezos said Amazon.com definitely does not have any plans to move toward a portal business model. "Portals are a great business to be in, but it just doesn't happen to be our business."
He added that, in order to become a portal site, key components such as news, stock quotes, e-mail services, and most importantly a Web search engine must already be in place. "Of those four things, we are not doing any one of those things," said Bezos. "Amazon is and has always been focused on being an e-commerce destination, and that will remain the focus."
Amazon will issue about 800,000 shares in connection with the acquisition of PlanetAll, and 1.6 million shares for Junglee. Each transaction is expected to be wrapped up within the quarter.