Amazon.com in No Rush to Find Next Acquisition
ReutersTuesday, October 12, 2004; 7:42 AMBy Nathan Layne and Kunihiko Kichise
TOKYO (Reuters) - Having just shelled out $75 million for China's biggest Web retailer, online shopping giant Amazon.com Inc. is in no hurry to acquire another company to accelerate its global expansion.
Amazon.com founder and Chief Executive Jeffrey Bezos told Reuters in an interview that the Seattle-based company can find better ways to use its growing cash pile, which totaled $701 million at the end of June, up about 10 percent from the year before.
"We are very focused on making sure that first and foremost we are doing a great job for our customers in the current countries and then over time, deliberately, step-by-step we will expand into other countries," Bezos said.
Amazon grabbed headlines two months ago when it announced that it would acquire China's Joyo.com, marking its full-fledged entry into the world's second-largest Internet market by users. Joyo sells books, music, movies and toys online.
Including Joyo, Amazon now operates Web sites in seven different countries outside North America, making overseas markets a key growth pillar for the 10-year old firm.
International sales contributed about 43 percent of the group's overall revenues of $1.39 billion in the second quarter to June 30. Amazon has said that it expects international sales to match North American sales on an annual basis by next year.
But Bezos said the company will not look to expand through acquisitions, instead concentrating its resources toward bolstering existing operations in its main overseas markets which include Germany, France, Britain and Japan.
Bezos was in Japan to oversee the local unit launch a toys and hobby site that it says will offer discounts of up to 30 percent, a potential blow to the business of Toys 'R' Us-Japan Ltd., the country's largest toy store chain.
Amazon said the new site will offer more than 20,000 items supplied by Japanese companies Bandai Co. Ltd., Tomy Co. Ltd. and Takara Co. Ltd., as well as toys from Lego and Playmobil and other foreign brands.
An official at Toys 'R' Us-Japan said their Web Site offers about 9,000 toys, but added that prices were about the same on both sites. Amazon is offering free shipping for any purchase above 1,500 yen, lower than 4,800 yen at Toys 'R' Us-Japan.
Amazon, which began operations in Japan four years ago and now has 3.8 million active customer accounts here, believes it can outmaneuver its rivals by leveraging its size and efficiency to keep its prices low over the long term.
"Lowering prices is easy, being able to afford to lower prices is hard," Bezos said with a hearty, ear-splitting laugh that has become a trademark of the 40-year old graduate of Princeton University.
Bezos said he was optimistic the Japan toy site would perform well, noting successful launches of toy and hobby stores in the United States, Britain and Germany over the past several years.
A self-proclaimed optimist, Bezos also said he was looking forward to healthy sales during the year-end shopping season, a key period for all retailers.
"If you look at our holiday shopping seasons over the last nine years every one has been bigger than the previous. And I certainly expect this to be no exception. So I expect we will have another record holiday season," Bezos said.
He did not give specific targets for profits or sales.
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