In its second-largest acquisition, Amazon buys the company for $970 million.
In its second major move in six months to seal off its business processes from competing e-retailers, Amazon.com has patented the technology that allows Web sites to link to its site in exchange for a commission.
These links, better known as affiliate marketing, are common among e-commerce sites--including Amazon's competitors--as ways to increase sales and traffic. The patent could lead Amazon to bar competitors from using the affliate marketing method or to charge them licensing fees for using the method. Amazom officials declined to comment on their plans for the new patent.
"I'm not sure what Amazon hopes to accomplish with the patent," says Ken Cassar, analyst at Jupiter Communications, New York. "Do they really want to become a technology provider?"
More likely, Casar adds, Amazon intends to slow down the affiliate programs of its competitors, including Barnesandnoble, CDnow and Reel.com. At the same time, Cassar wonders how enforceable latest the patent will be.
Under affiliate deals, a Web site typically displays a link to the retailer's catalog and receives a percentage of the transaction as a referral fee.
Last September, Amazon patented its "one-click" buying technology, which allows customers to complete orders with a single click of the mouse. Amazon won a preliminary injunction barring Barnesandnoble.com from using a similar purchasing system. The suit is pending.