November 8, 2010, 9:17 AM

Amazon will buy Quidsi Inc. for $500 million

Quidsi is the parent company of Diapers.com and Soap.com.

Mark Brohan

Research Director

Lead Photo

Amazon has made another purchase to satisfy its growing appetite for acquiring thriving niche web retailers: Quidsi Inc., the parent company of Diapers.com and two other niche e-commerce sites focused on mothers and young families.

Amazon, No. 1 in the Internet Retailer Top 500 Guide, is acquiring Quidsi (No. 85) in a deal valued at $500 million. Under the specific terms of the deal, Amazon will acquire all outstanding shares of Quidsi, which is privately held, and also assume about $45 million in debt and related acquisitions, Amazon says.

“Amazon shares our commitment to the customer,” says Quidsi CEO Marc Lore. “We are excited to be part of a company that will help us to serve an even larger audience, and we will continue delivering unexpectedly great service that makes life a little easier—that is our mission.”

Amazon expects to close the deal next month.”This acquisition brings together two companies who are committed to providing great prices and fast delivery to parents, making one of the chores of being a parent a little easier and less expensive,” says Amazon CEO Jeff Bezos.

The acquisition of Quidsi, which last week launched BeautyBar.com, a new online boutique for luxury beauty products, is Amazon’s third in recent months and fourth in about a year. In October, Amazon acquired BuyVIP.com, a fashion and lifestyle online buying community with more than 6 million members in countries including Spain, Germany and Italy for an undisclosed price. In June, Amazon also acquired daily deal site Woot.com (No. 176), one of the pioneers in offering the one-day bargains. Terms of the deal weren’t announced. Also in September Amazon purchased AmieStreet.com, an online music store and social media site.

Similar to its almost $900 million acquisition of Zappos.com in July 2009, Amazon is acquiring Quidsi as another company with fast-growing revenue and a strong customer niche. Quidsi is on track to generate online sales of about $300 million in 2010, up 62% from $182 million in 2009, says Lore. Quidsi is generating more business online by giving busy mothers with new and growing families easier and faster ways to shop online, says Lore.

In October Quidsi’s rolled out a same-day delivery, which is free on orders of over $25, for shoppers in its core market of Manhattan.

“With same-day shipping in Manhattan, we have made online shopping one step closer to completely eliminating the need for physical stores,” Lore says.

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