Parent Company of Diapers.com & Soap.com to be Acquired by Amazon | DomainInvesting.com
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Parent Company of Diapers.com & Soap.com to be Acquired by Amazon

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Fortune is reporting that Amazon is acquiring Quidsi, the parent company of Diapers.com and Soap.com, in a $540 million acquisition. This is a cash deal, and the founders of Quidsi have been reportedly signed to employment contracts by Amazon.

I think this is a very smart move by Amazon, and it follows the company’s acquisition of online retailer Zappos, which was announced about 15 months ago. The two companies have continued to run separately after that acquisition, and I would imagine Amazon will continue to leverage the Diapers.com and Soap.com brands as separate business entities.

It was just a few months ago (in July of 2010) that Quidsi launched Soap.com. At that time, it was reported that Diapers.com had revenue of over $300 million annually.

As I mentioned previously, Quidsi’s business model seems very similar to TABcom, LLC (known before as PetsUnited), the $100 million+ company that operates Dog.com, Horse.com, Garden.com, Fish.com, and many more e-commerce websites on generic domain names. I wonder if Amazon will give Alex Tabibi a call in the near future.


About The Author: Elliot Silver is an Internet entrepreneur and publisher of DomainInvesting.com. Elliot is also the founder and President of Top Notch Domains, LLC, a company that has sold seven figures worth of domain names in the last five years. Please read the DomainInvesting.com Terms of Use page for additional information about the publisher, website comment policy, disclosures, and conflicts of interest.


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Comments (13)

    Mike Sullivan

    Diapers.com proved a great business model. I like that Amazon had enough interest to acquire the businesses. Also good press for the keyword domain market.

    November 6th, 2010 at 9:05 pm

    Dean

    The part of this deal that most don’t know is that Amazon tried to buy Diapers.com repeatedly (several times) but Diapers would not sell. Finally Amazon started undercutting Diapers threatening to put them out of business, so Diapers caved in. It’s how big business get’s done.

    http://www.businessinsider.com/amazon-diapers-price-war-2010-11

    November 6th, 2010 at 9:47 pm

    brian k

    @ dean
    Last i read diapers.com was not profitable.
    If what you are saying is true they probably had no choice.
    Cant lower prices on a business that already doesn’t make any profit.

    November 6th, 2010 at 10:15 pm

    Poor Uncle

    I don’t know how much money you can make by selling diapers. But one would have to imagine the margin is extremely low. Half a billion dollars cash in exchange for diapers. I’d take the money and run. Congratulation to the founders.

    November 6th, 2010 at 11:26 pm

    domains

    Awesome news and generic .com domain names! .com is king and its about businesses. IMO they must have reported some sort of a profit or the purchase price would not be out there in that range.

    .COM is king folks

    Now we can read soon how people have IHaveDiapers.Com and there value went up and Diapers.Co, Soap.Co and how values shot up, LOL..

    November 6th, 2010 at 11:29 pm

    Rob Monster - Epik

    This looks like more evidence that Amazon sees the value of domain names as federated brands. Amazon is increasingly looking to me like a platform and an operating system for commerce.

    The domain alone would have been worth $1-2 million at best. With an operating strategy it became a brand which in turn made it worth materially more.

    Textbook example of what is possible through effective development of eCommerce brands that get traction. Predatory pricing action by Amazon is certainly a subject to watch.

    November 6th, 2010 at 11:31 pm

    George Pickering

    Check out Hayneedle.com. They have tons of great e-commerce domains in the home and outdoor decor market.

    Couple examples
    http://www.adirondackchairs.com
    http://www.firepits.com

    November 6th, 2010 at 11:41 pm

    brian k

    @ george
    I have been watching them for a while.
    They also own spottingscopes.com
    I only know this because I own spottingscopes.net

    November 7th, 2010 at 12:00 am

    Adil

    The reason Quidsi wasn’t profitable was because it was expanding. A lot of companies find it difficult to grow and expand while maintaining profitability.

    November 7th, 2010 at 3:58 am

    M. Menius

    It would be interesting to browse a list of top generic domain names owned specifically by larger companies. Over the past decade, a good number of them have been acquired often because they fall right in the middle of a company’s main business focus.

    At other times, the acquired domain seems rather outside of anything the company has been involved in. But obtaining the top domain creates an instant inroad for the company into an industry.

    Geo domains fit into this model too whereby a person/company buys the city.com, joins AC, and they attain instant clout within a geographical area. Not to say that’s a formula for instant success, but it is the single most powerful step in a longer range plan.

    November 7th, 2010 at 5:56 am

    BFitz

    Anyone know what Quidsi paid for the domain when they launched?

    November 7th, 2010 at 10:40 am

    Steve

    This could be a coincidence but someone made me x,xxx offer on dipaers.mobi.

    November 7th, 2010 at 10:53 am

    Ellen

    Amazon is really the biggest game in town regarding ecommerce.

    I promote many products as an affiliate marketer, and I have seen amazon conversion rates of 30%-50%, while I see conversion rates with other retailers in the single digits. Amazon is a master at up-selling, cross-selling, and gaining the trust of the typical Internet user to fork over her credit card.

    If Amazon can afford to undercut other merchants, it is because they have done the right kind of marketing to build a business that can afford to offer lower prices.

    November 9th, 2010 at 9:45 am

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