On the same day it made its official entry into the online auction market (see separate story), Amazon.com Inc announced that it has bought a 50% stake in start-up Pets.com Inc, an e- tailer of pet supplies. The deal – whose value has not been disclosed – sees Amazon joining forces with venture capital firm Hummer Winblad Venture Partners to fund the company’s first round of financing. The transaction is due to close in early April.
The investment will be used to fund the Seattle-based company’s growth, develop its brand name and build up its distribution channels through partnerships. Pets.com’s business plan is a simple one, as it hopes to use the internet to corner a chunk of the estimated $23bn-a-year market for pet-related goods and services. Founded last year, it already claims to be the largest internet pet supplies firm. For Amazon, the deal is another step toward its previously-announced goal of becoming an all-around internet retailing giant. Amazon will gain a seat on Pets.com’s board.
