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Amazon adds new stores
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November 9, 1999: 12:09 p.m. ET
Web retail portal opens four new e-commerce areas, acquires tool firm
By Staff Writer Michele Masterson
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NEW YORK (CNNfn) - Amazon.com said Tuesday that it is launching four new online e-commerce sections and has acquired a North Dakota mail order tool company.
The market did not react favorably to the news, sending shares down 6-3/16 to 71-13/16 in mid-morning trading.
In anticipation of the announcement, shares of Amazon (AMZN) stock had surged Monday, shooting up 13-1/16 to 78 at the market's close. Speculation that Amazon would partner with a number of companies sent the stock soaring as a result of an earlier press advisory.
Amazon said it will launch the new "stores" Wednesday, adding hubs selling software, video games, home improvement and gift ideas.
The company, the Interent's leading retail portal, also announced it acquired Tool Crib of the North, a mail order tool company based in Grand Forks, N.D. The company would not comment on terms of the acquisition.
The stores will offer extensive inventory that the company will hold and fulfill its own order processing. The software store has 10 times the number of titles found in a physical store, and the home improvement section will offer 6,000 tools, according to Amazon CEO Jeff Bezos.
Bezos cited the booming home improvement industry as an inducement to add the new product line. He said the U.S. market for tools is estimated at $145 billion. Monday's rumored partnerships had included Home Depot (HD), and tool maker Black & Decker (BDK).
"The earth's most customer-centric company is figuring out what the customer wants and how to give it to them," Bezos said at Tuesday's news conference. "By offering a universal selection of products, we can do something online that you could never do in the physical world."
The Seattle, Wash.-based online retailer now offers books, videos and DVDs, CDs, electronics and toys. It also runs Internet-based auctions and recently launched a venture called "zShops," providing small e-commerce operations with a venue.
Bezos said he fully expects Amazon to realize profits from the new ventures.
"We expect all our businesses to have a positive impact on our top and bottom lines," Bezos said. "Profitability is very important to us or we wouldn't be in this business."
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