Amazon (AMZN) announced it is buying Whole Foods (WFM) for $13.7 billion on Friday, purchasing the upscale grocery chain for $42 per share—a 27% premium on its share price of $33.06. This is the Seattle giant’s largest acquisition to date, far surpassing the $1.2 billion it spent to buy online shoe seller Zappos.com in 2009.
Over the past week, Amazon rumors did not revolve around a purchase of Whole Foods, but rather that of another company—Slack, a set of workplace chatroom tools, that boasts 5 million users and may be worth up to $9 billion.
The possibility of taking in a rising office messaging tool and a high-end supermarket in the same week is a testament to Amazon’s well-known vastness. The company, which boasts a massive market cap of $469 billion, has expanded so far from its original internet-bookstore mold that anything seems possible.
It’s no secret Amazon pursued Whole Foods to get a real foothold in the supermarket business and boost its food delivery service to compete with major grocery stores. Whole Foods has both the massive infrastructure for food logistics and a reputation of quality.
In general, however, Amazon CEO and founder Jeff Bezos often leaves company strategy opaque. To get some insight into its vision, it makes sense to look at the companies it has acquired. Since it went public, Amazon has bought or made large investments in almost 100 companies, according to Bloomberg. (CrunchBase charts its acquisitions alone at 76.) Just over 20 of these companies were acquired or invested in by Amazon over the past two years. For the most part, they fall into a few main categories.
Amazon’s order history
The first category consists of retailers that Amazon has bought to build a bigger Amazon. Whole Foods is included here, as are Zappos.com, Audible, and Shopbop. Many of these serve to expand Amazon’s product offerings into newer territory, which may be more competitive. Amazon has also bought companies like Souq.com, which, as the Amazon of the Middle East, enabled Amazon to leap forward in that international market.
It’s not the only consumer category of companies Amazon has dipped into. In addition to buying retailers, Amazon has acquired companies to improve existing consumer products. It acquired an Indian publishing company to give it a leg up on books in the international market, a gaming company, Curse, for its Twitch gaming platform. It’s also bought an Indian payments company to improve its online payments platform, and an AI image recognition company called Orbeus.
Amazon, of course, has also invested in home internet-of-things products like Petnet, a remote pet-feeding device, Rachio, a wi-fi-enabled sprinkler system, and Luma Home, which makes wi-fi devices. None of these investments was an all-in acquisition, but it tips the company’s cards that Alexa may only be the beginning.
The next category takes a step away from the consumer-facing part of the company. Though Amazon’s main business is consumer-driven, the company’s cloud business, Amazon Web Services (AWS), is massively lucrative, taking in $2.56 billion in the first quarter of this year. Its influence is far-reaching: Many websites you frequent use Amazon’s services.
The acquisitions that have fueled Amazon’s cloud business includ Thinkbox, Nice, havest.ai, Iconic, and Elemental. These companies provide technology relating to cloud services that include security and media rendering, which could have uses beyond AWS. Amazon’s devices and Prime content services are nothing if not media heavy.
The breadth of these categories and Amazon’s overall portfolio speaks to the company’s – and notably Bezos’ – outsize ambition more than anything else. But by acquiring a company for almost $14 billion, that’s already apparent. Amazon is just getting started.