Amazon’s M&A team has gotten off to a busy start in 2019.
This week’s announcement that the tech giant plans to acquire mesh WiFi startup eero makes three buys so far this year, and we’re only about six weeks in. Amazon was aggressive with acquisitions last year as well, spending more than $1.6 billion snapping up other companies, highlighted by the purchases of smart doorbell company Ring and online pharmacy PillPack.
Amazon has become, beyond its status as the top online retailer, the leader in cloud computing, a major player in brick-and-mortar retail, a growing electronics device maker, a force in the smart home market, a big-budget movie and TV studio, a burgeoning healthcare company and about 100 other things. And the variety of its acquisitions reflect that.
So who’s next? Analysts have speculated a wide variety of acquisitions for Amazon, ranging from retailers like Target and Lululemon to the tech-powered real estate brokerage Redfin.
Everyone’s got an opinion on which companies Amazon should/will acquire, and so do we. Read below for our thoughts on companies Amazon should scoop up, from brick-and-mortar retail heavyweights, to a health tech startup, to a movie theater chain and more.
Which company do you think Amazon should acquire next? Send your nominations to tips@geekwire.com, and we just might print the best ones.
John Cook, GeekWire co-founder: Accolade. In the past five years, Amazon has shown its strength and varied business model with purchases in a wide array of industries, from traditional retail (Whole Foods in 2017) to cloud video services (Elemental Technologies in 2015) to smart home technologies (Ring in 2018).
Given the company’s diversified acquisition palate, choosing just one company that Amazon will gobble up in 2019 is like picking something to eat on the Cheesecake Factory menu. But I am going to stick with my prediction from last year, and say that Amazon — or more specifically the new joint venture of Amazon, JPMorgan and Berkshire Hathaway — is going to purchase Seattle healthcare services company Accolade.
Former Accolade executive Jack Stoddard joined the unnamed Amazon, JPMorgan and Berkshire company last September, indicating a thirst for the type of healthcare services provided by Accolade.
At the 2018 GeekWire Summit, Accolade CEO Raj Singh — who previously sold Concur to SAP for $8.3 billion — didn’t recoil when asked about the possibility of an Amazon alliance. And the tech exec had some flattering things to say about the new healthcare venture, noting that he loves their vision.
“They’re really setting an example, which I think is massively important, that says: ‘It’s not good enough anymore. And if public policy’s not going to fix it and the existing ecosystem [isn’t] going to fix it, we’re doing it.’ I love that,” Singh said. “That is the epitome of entrepreneurial spirit, embodied by three massive companies.”
Maybe Singh and Accolade would like to tie into that spirit.
Kurt Schlosser, staff reporter: Seattle Seahawks. Amazon has already shown its attraction to the NFL by dropping big money on the rights to stream “Thursday Night Football” games. The league and the tech giant even teamed up on a new Alexa skill to help casual fans learn more about the game. After the death of Seahawks owner Paul Allen, some questioned whether the franchise might eventually be sold and if a local buyer could be found. Well, Jeff Bezos should go deep … into his piggybank.
The world’s richest person has already made pancakes on a Saturday morning with the team’s quarterback, Russell Wilson. And Bezos has backed the budding startup founder’s ventures into tech over at TraceMe and Tally. The sight of the two exchanging a friendly greeting at the NFL Honors ahead of the Super Bowl earlier this month looked like a scene that could be repeated every Sunday in Seattle.
Monica Nickelsburg, civic editor: Etsy. Amazon launched Handmade, an Etsy competitor for artisanal goods, in 2017. Etsy’s shares took a hit in what seemed like a bad omen for the handmade goods marketplace. But Etsy seemed to rebound, topping $1 billion in gross merchandise sales for the first time at the end of 2017. Meanwhile, Amazon’s Handmade marketplace doesn’t appear to be making much of a splash. It makes sense for Amazon to acquire Etsy and continue to operate it independently like the Seattle tech giant did when it gobbled up Zappos. Etsy brings with it valuable sellers and loyal customers who are attached to the marketplace’s brand and aesthetic.
Todd Bishop, editor: Landmark Theatres. Amazon last year was reported to be in the running to acquire Landmark Theatres, and in many ways this would make a ton of sense. The tech giant is increasingly interested in blending its digital strengths with a physical presence. Brick-and-mortar movie theaters would give Amazon Studios a new way to distribute its feature films and cater to Prime members. Landmark, backed in part by Mark Cuban, has more than 50 movie theaters in major cities around the country.
Even if a Landmark Theatres deal doesn’t work out, this is an interesting area for Amazon to explore. Just imagine the possibilities to offer movie tickets as a benefit of Prime membership. No doubt Amazon Go technology would enable people to skip the traditional box office. And certainly there would be drones to deliver the popcorn to your seat, although on second thought, maybe that’s not such a good idea.
In any event, this is a natural area for Amazon to explore, and an acquisition of some sort makes a whole lot of sense.
Tom Krazit, cloud and enterprise editor: Snowflake Computing. Amazon Web Services has already been busy on the acquisition front of late, snapping up CloudEndure in January and Vancouver’s TSO Logic in late 2018. But as it continues to print money from its market-leading cloud computing service, which did $25 billion in revenue during 2018, other strategic deals that fit its culture definitely remain on the table. If it wants to go big, Snowflake Computing’s fast-growing data warehouse (which comes at a $3.5 billion valuation) could round out its database strategy, while a more affordable acquisition like Portland’s Twistlock could improve its container security services.
Taylor Soper, staff reporter: Kohl’s. Amazon has already partnered with the big department store chain, installing smart-home boutiques and opening return centers inside Kohl’s locations. Don’t be surprised to see Amazon take the more ambitious step of swooping up Kohl’s, especially given the tech giant’s recent investments in online apparel and physical retail. Bonus: Kohl’s CEO Michelle Gates has Seattle roots, earning her MBA from the University of Washington and working more than 16 years at Starbucks.
Nat Levy, staff reporter: 7-Eleven. Amazon has picked up the pace of expansion for the cashier-less convenience concept Amazon Go, recently opening its 10th store. Still, that’s a far cry from the reported 3,000 stores the company is considering opening over the next couple years. The best way to rapidly expand Amazon Go would be to acquire an established player and outfit existing stores with the “Just Walk Out” technology.
Acquiring 7-Eleven would be a super ambitious move; the company says it has 11,800 locations in North America alone. There are certainly some complications to a potential deal, chief among them 7-Eleven’s model of franchising and licensing stores. But such a deal would instantly make the tech giant one of the biggest brick-and-mortar retailers on earth.
Have a different idea? Send your picks to tips@geekwire.com.
Hear John Cook and Todd Bishop discuss Amazon’s acquisitions on this episode of the GeekWire Podcast.
