Amazon Acquisition and Equity Investment - Research Paper Example

2- SET OF COMPANIES ACQUIRED BY AMAZON IN 2011 In 2011, set of companies were acquired with price of US $771 million by Amazon (Amazon, 2011). None of the companies are defined specifically but all are aimed at market development for Amazon for increasing customer base as well as sales channel increase in portfolio. Two of the companies included Marshall Cavendish US Children’s Books Titles and LoveFilm International Limited Etc (Amazon, 2013). The change in sales and net income from acquisition was as follows: Set Of Companies in 2011 2011 2010 Sales 48,077 34,204 Change In Sales 40.

56%   Net income 631 1152 Change In NI -45.23% (Amazon, 2011) The above acquisition also impacted sales positively. But rise in sales is increasingly offset by the downside movement of net income. With acquisition of companies Amazon.com has burdened its net income with additional five percent than magnitude of sales rise. Hence, the acquisition cannot be referred as successful strategy. 3- AQCUISITION OF ZAPPOS.COM, INC. The acquisition was conducted on November 2009 with purchase price of US $.

1,134 million (Amazon, 2009). The acquisition was aimed at market penetration and expanding Amazon’s presence in categories shoes and apparel. The impact of Zappos.com Inc on the sales and net income has been highly successful as reflected from the given below change in sales and in net income: ZAPPOS.COM, INC IN 2009 2009 2008 Sales 24,509 19,166 Change In Sales 27.88%   Net income 902 645 Change In NI 39.84% (Amazon, 2009) Hence, Zappos.com. Inc acquisition can be regarded as successful from results shown above as not only the sales have increased but the profits have increased as well.

ANSWER # 2 The assessment of each of the acquisitions mentioned above with respect to its timing of investment is conducted as follows as discussed in annual reports of the company: FOR Kiva IN 2012 Investment Value $678 million SALES Actual Pro Forma Change 2