|
Amazon expands again
|
 |
February 1, 2000: 9:43 a.m. ET
Online retailer takes stake in home products retailer to develop home site
|
NEW YORK (CNNfn) - Amazon.com now wants to be your decorator -- on Tuesday, the online retailer announced it will take an 18 percent stake in home products retailer living.com to develop a home living store on its site.
Under the agreement, Amazon will receive $145 million from living.com over the next five years.
Acting as the exclusive Amazon home living store, the site will offer furniture, bedding, home textiles, decorative accessories, tabletop, window treatments, and related home products to Amazon customers. The home living store will be featured on the Amazon site.
Amazon will also take an 18 percent stake in Living.com, with warrants for an additional 9 percent, due upon the closing of the deal, which is scheduled for late in this quarter. Amazon will take a seat on the living.com board of directors.
The deal comes on the heels of Monday's announcement of Amazon's investment in Audible.com (ADBL: Research, Estimates) to provide audio content to users as well as Friday's news of 150 job cuts at Amazon.
"This deal is comes as no surprise," said Mike May, an e-commerce analyst with Jupiter Communications (JPTR: Research, Estimates). "This is the last emerging category that Amazon doesn't have a stake in."
"Living.com's size is immaterial," May said. "By virtue of Amazon investing in them, they stack the deck in their favor and are poised to become a clear category leader."
The home living products market is estimated at $180 billion. May said he believes the field will become more crowded with competitors, which now include startups such as Homepoint.com and GoodHome.com.
Austin, Texas-based living.com was launched in July 1999 and has merchant alliances with America Online (AOL: Research, Estimates), Yahoo! (YHOO: Research, Estimates) and Lycos (LCOS: Research, Estimates). Key investors in the startup include Benchmark Capital, Austin Ventures, Starbucks, Pivotal Asset Management, GE Capital and Comdisco.
One of the earliest sites, Furniture.com, traces its roots back to a bricks-and-mortar firm, and came online in 1997 as Furniture.com. The site was re-launched last year and CMGI (CMGI: Research, Estimates) holds a 17 percent stake in the company. In 1999, Furniture.com reported losses of $43.7 million and revenues of $10.9 million. On Jan. 27, the company filed for an initial public offering of $50 million, underwritten by Goldman Sachs.
Offline retailers are also starting to jump on the Internet bandwagon, including Crate and Barrel and Pottery Barn, which currently does not offer items for sale on the Web, but provides a store locator and accepts catalog requests.
In early trading Tuesday, Amazon edged up ¾ to 65-5/16. 
|
|
|
|
|
|
Amazon
Living.com
|
Note: Pages will open in a new browser window
External sites are not endorsed by CNNmoney
|
|
|
|
 |
|
