Comments on: Amazon hedges against the rise of the machines http://blogs.reuters.com/breakingviews/2012/03/20/fair-to-middling/ Mon, 26 Sep 2016 03:26:00 +0000 hourly 1 http://wordpress.org/?v=4.2.5 By: andremp http://blogs.reuters.com/breakingviews/2012/03/20/fair-to-middling/comment-page-1/#comment-9010 Tue, 20 Mar 2012 18:20:49 +0000 http://blogs.reuters.com/breakingviews/?p=10212#comment-9010 I agree that it’s difficult to justify an acquisition in which you either take on the task of supplying your competitors or pay for revenue that you’ll never realize. In this case though I think strategic concerns about a particular competitor, eBay, may help justify the acquisition.

With it’s purchase of GSI Commerce & a number of smaller companies over the last few years eBay has made a clear move into the e-commerce logistics space. With those additions eBay is one of the few companies that can rival Amazon’s ability to supply an end to end e-commerce infrastructure stack (web infrastructure, billing, and fulfillment).

Amazon obviously has a long competitive history with fellow e-commerce giant eBay, but it has also squared off against GSI a number of times. Following a public blowup in 2005 Toys R Us defected from Amazon’s fulfillment and storefront services to GSI commerce.
GSI also offers a direct competitor to Amazon Prime, dubbed Shoprunner, for customers at the web storefronts that it operates.

With this purchase Amazon could choose to deny eBay access to Kiva’s innovative technology, potentially damaging eBay’s ability to offer competitive rates for its 3rd party e-commerce services & Shoprunner.

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