AmazonThe rumors that that e-tail giant Amazon is looking to buy Quidsi, parent company of Diapers.com, have proven true. And the price tag of around $545 million (with debt assumption) is much along the lines that Fortune's Dan Primack, who broke the story, predicted. The deal comes not too long after a Bloomberg Businessweek feature article about Quidsi and the ambitions of the two founders to beat Amazon (AMZN) at its own game. On the Internet, going against Amazon has meant selling logistic-intensive consumer goods at extremely low margins and extremely high volumes.

Many of the biggest big-box stores, despite sinking tens of millions of dollars into their online attempts, have failed to even come close to Amazon. Perhaps equally important, Quidsi launched Soap.com in June and BeautyBar.com on Nov. 2. So, Quidsi appeared to be scaling very rapidly into multiple markets, something that makes Amazon uncomfortable. The giant had already been engaged in a price war with Diapers.com.

But Amazon has taken care to nip that war quickly, making Quidsi Amazon's second big acquisition of a potential competitor. CEO Jeff Bezos previously bought shoe and apparel e-tailer Zappos.com for $1.2 billion. With Amazon stock pumped up at $170 -- close to 52-week highs -- the company has plenty of dry powder for other big buys. So who are some likely acquisition targets next in line?

Catering to Harried Homemakers and Busy Bachelors

Two obvious potential buys are Alice.com and Drugstore.com (DSCM). Alice.com is a fast-growing online store for all manner of drugstore and grocery-store essentials, from food to trash bags to toothpaste to toilet paper. Alice offers free shipping on all orders (of a minimum size) and claims its pricing reflects direct-from-manufacturers savings. It also learns your likes and dislikes and plies you with coupons for products it suspects you'll want to buy.

Like Amazon, Alice also offers a subscription feature that allows harried homemakers or busy bachelors to set regular refills of critical items like paper towels. I've used it, and Alice is an extremely slick. In many ways, it's easier to use than Amazon. The company is private and venture-backed, and it hasn't revealed sales figures to date. But I'd bet that Amazon's mergers and acquisitions team in Seattle has taken notice.

Another potential target is Drugstore.com, which is more of a traditional e-tailer and is publicly traded. Its market cap of $178 million makes the company a mere amuse-bouche for Bezos. Drugstore.com has a very strong female following and provides a robust product selection in high-margin areas like natural health and beauty products.

Like Amazon, it also has extremely affordable shipping. Drugstore.com has long been rumored as acquisition bait for Amazon, and plugging the competitor's volume into Amazon's existing logistics and shipping system would likely further maximize Amazon's economies of scale. Rest assured, Bezos is hardly done buying competitors. And these two could be next.


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misshla

I had ordered D-Mannose Months ago. I made an error which I tried to cancel but system would not allow it. It seems I ordered same product twice. I waited till products came by mail so first item i kept. The following day received the product that I tried to cancel, so this I did not open but just wrote "Return to sender" I did this immediately. When a a few weeks went by I tried to see if they had received it and for them to sent back my money. It was 4 bottles of D-Mannose. I then wrote a letter which they had called me to inform me they were not the ones to handle this. Address I sent it was on bottle. I then tried through the computer system to Amazon, then I wrote again another letter. To this day I have not heard from anyone. On last letter I mention if I could not receive refund to sent back my 4 bottles. I still did not hear from them. All this time which has been since July have not received or heard from anyone. I tried the 2 fist bottles of D-Mannose and it works great so far. I have been passing the word around that this product is very good. That is the reason I prefer you sent me back the bottles and not the money. Hope Alvarran 8657 Hoffman Ave Riverside, Calif. 92504 Misshla@aol.com 951-351-9936

November 08 2010 at 4:13 PM Report abuse rate up rate down Reply