Amazon Promotional Deal Nets $145M

E-tail giant Amazon.com has announced its third major promotional deal in roughly a week, bringing its tally to a tidy $332.5 million (US$).

The latest deal, with home products and services retailer Living.com, is worth $145 million. Living.com will make payments over five years for the right to become the exclusive supplier of furniture, bedding, home textiles, decorative accessories, tabletop, window treatments, and other related home categories in a new Amazon.com Home Living Store.

Cashing In

Amazon, which has been plagued by questions about its short-term profitability, has clearly set out to infuse itself with cash by bringing promising e-commerce companies into its orbit.

The company will get $105 million over the next three years from online pharmacy Drugstore.com and $82.5 million over the next five years from online auto seller Greenlight.com.

Amazon agreed to buy five percent of Greenlight.com, with warrants to increase that stake to as much as 30 percent. The company plans to launch a network of car dealerships online this spring.

The Drugstore.com deal includes Amazon’s purchase of additional shares in the company for $30 million, to bring its total stake to 28 percent. Drugstore.com will get its own “tab” at the top of the Amazon.com home page to link consumers to shopping services hosted by Amazon.

Amazon says it has been buying up stakes in Web sites that are focused on “improving the lives of customers by making shopping easier and more convenient.” The company’s holdings include stakes in Pets.com, HomeGrocer.com, sporting goods retailer Gear.com, luxury watch and jewelry store Ashford.com, and gift registry Della.com.

Living Large

The nine month-old Living.com will get exposure to Amazon’s 16 million regular customers, enabling Internet shoppers to switch seamlessly between the two sites, the companies said.

Living.com already has shopping pages or links on America Online, Lycos and Yahoo!, which have become some of Amazon’s biggest competitors since the entire portal category expanded into shopping and content services.

Amazon agreed to buy an 18 percent stake in Living.com, with warrants for another nine percent. Amazon will also have a seat on the Living.com board of directors.

In addition to Amazon’s unspecified investment, Living.com has raised $41.5 million from venture capitalists, including funds from Benchmark Capital, Austin Ventures and Starbucks Corporation.

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