Amazon buys Diapers.com for $540 million

Diapers.comAmazon got set to announce another acquisition this weekend. The target this time is a company that uses complex algorithms to deal with baby poop. Amazon is looking to buy Quidsi, the company that owns Diapers.com, for $540 million.

I don’t have any children, but I still know that diapers are about as hot a topic among new parents as the impending Call of Duty launch is among fifteen year-old boys. Quidsi is of particular interest to Amazon because of its technical approach to problems like stocking shelves. One of the company’s founders told Inc. last year:

So before we launched, we built proprietary software from scratch. We built software with computational algorithms to determine what the optimal number of boxes to have in the warehouse is and what the sizes of those boxes should be. Should we stock five different kinds of boxes to ship product in? Twenty kinds? Fifty kinds? And what size should those boxes be? Right now, it’s 23 box sizes, given what we sell, in order to minimize the cost of dunnage (those little plastic air-filled bags or peanuts), the cost of corrugated boxes, and the cost of shipping. We rerun the simulation every quarter. Using the right box probably adds close to 1 margin point.

Sound familiar? That’s exactly the kind of thing that helped Bezos make a name for himself. It’s also how Zappos, which Amazon also acquired not so long ago, ran their online shoe store.

The crazy part of the deal, though, is that Amazon paid $200 million over the company’s most recent venture valuation. I’m not sure why, unless they really wanted to be sure they were the ones to get it. Apparently Wal-Mart had also been sniffing around Quidsi.

Source: CNN Fortune

Will Amazon Singles survive the deluge of crap it’s sure to elicit?

Graphite Kindle.

Yesterday Amazon announced a new category of products for its Kindle store. Dubbed Amazon Singles, the new category is aimed at getting consumers to pay for written works that fall somewhere between 10,000 and 30,000 words, or 30 to 90 pages.

There are a few problems with this strategy. First, there’s no market for that kind of content. That sounds like a good thing, but in my mind there is no market for a reason. Works of that length tend to be either too much or too little, rarely just right. More importantly, though, is that they aren’t published anywhere else. Though Amazon wants you to believe that great ideas will surface as a part of the Singles program, the reality is that the fairly small Kindle-using population will have access to these things and only a percentage of those users will actually read what’s inside.

More likely is that Amazon will see a surge of submissions to its digital publications service, submissions that are, as we should expect, too much or too little on a given subject. Plenty of would-be authors have a 60 to 90-page project attracting silverfish on a floor somewhere, but how many of them would we actually want to read through?

The one thing Amazon got right is lower prices. There will be people attracted to those lower prices, but it will be solely for price. Several authors have already set a precedent for free content on the Kindle, a practice that has yielded some decent exposure. Will the same be true for shorter works that come with a fee? I doubt it.

Amazon looks to hook college students

Amazon box.A couple years back I took the free trial of Amazon Prime and good god did I abuse it. Of course, that’s what Amazon hopes for. You get free two-day shipping and you buy all kinds of shit you don’t need just so it can arrive quickly. It is a cathartic experience.

Amazon is hoping to lure college students with the same deal. To take advantage of the deal, all you need is a .edu email address and have yourself enrolled in at least one college course. My girlfriend actually discovered this the other day by accident and got way too excited about it. I have a feeling we’ll be seeing an inordinate number of packages arriving over the next few days.

So, college students, consider yourselves warned. Yeah, you save $79 on the service, but you’ll blow past that number in about a week of unnecessary purchases.

Amazon launches IMDB app for the iPad

IMDB on the iPad.Though Amazon may be loathe to admit the iPad’s success, that hasn’t stopped it from aggressively developing and releasing applications for Apple’s successor to the Kindle. Along with the Kindle app for the iPad Amazon has released an IMDB app that takes advantage of the iPad’s big ol’ screen.

In this case the app only differs from the iPhone in that it’s been optimized for a larger screen. It still offers the same information, which according to IMDB is access to the info on 1.5 million movie and TV titles and 3.2 million celebrities, actors, actresses, directors and crew members.

One of the best features for the iPad will be watching trailers in HD. That screen is just so damn pretty.

Amazon wants to be your digital media hub

Amazon box.Amazon’s been struggling to keep up in the new ebook market. With Apple fast encroaching and stealing away publishers with the promise of more flexible contracts, Amazon’s trying to keep its hand deep in the content cookie jar, in some cases with threats. But Amazon knows that books aren’t the only frontier. As some recent job postings show, the company is looking to get into game download distribution, like Valve’s Steam.

The news comes from Lazard Capital, market analysis firm that says, “As in other segments of digital media, we expect Amazon to pursue new opportunities as an aggregator of online games, similar to Steam (PC), BigPoint (browser) and others.” It would put Amazon in an interesting position that no one else holds in the market, sort of like the Wal-Mart of digital media. If this is true I’d say it’s entirely possible to see them get into the video market as well, with some sort of answer to the iTunes platform. I know plenty of people that currently choose Amazon for music over the Apple alternative.

The news is backed up by claims that Amazon is hiring somewhere in the range of 1,000 new employees, many of whom will be software developers.

Source: MCV