How Amazon’s Bad Investments Led it on Thin Ice
Amazon’s stake in electric vehicle maker Rivian was once worth $27 billion—that was in November, shortly after its IPO. The past years, the EV maker has been constantly struggling with production, parts, and supply chain issues, resulting in Rivian’s stock price plummeting to a 52-week low in 2022. Started originally in 1995 as an online bookstore Amazon has expanded the business alongside its flagship search with the market throughout the years. But of course not every investment has panned out well for the company. With Amazon owning about 17% of Rivian, the investment cost the company annual loss of $2.7 billion last year–its first unprofitable year since 2014 and a record annual loss for the company. The fiasco with Rivian has led Amazon to the list of the 13 biggest electric vehicle business failures in American history. Earlier this year, WSJ reported, Rivians plans to call off the exclusive deal with the tech giant after it ordered fewer-than-expected delivery vans. As part of a deal made in 2019, the online retailer signed on to purchase 100,000 delivery vans from the electric vehicle company, but with Amazon reportedly only meeting the bare minimum of ordering 10,000 vehicles, the two are renegotiating the initially promising agreement. An Investment Cemetery While Bezos finds ways to blast himself into outer space or test-driving a 13-foot robot, he simultaneously also hunts for the next company to strengthen the Amazon arsenal. Over nearly two decades, the tech giant has made over 200 investments and 106 acquisitions. While the number is praiseworthy, the aftermath of the funnelled money has not been so. All the way back to 1999, the ecommerce giant acquired Alexa.com for $250 million. The company providing paid subscription services with SEO and analytics tools which operated for 15 years had to be eventually shut down in 2022. While the company officially did not reveal the reason for discontinuing the service, Semrush reports suggested that there had been a constant decline in its traffic over the years. Alexa Internet was one of the lots whose graves were dug by Amazon. In 2013, Amazon acquired LiquaVista, a liquid display firm, from Samsung, aiming to furnish Kindle e-readers’ battery-efficient screens. However, evolving screen tech quickly made LiquaVista’s “electrowetting” technology obsolete. As a result, in 2018, Amazon chose to shut down the company along with multiple in-house products. Between 2005 and 2015, Amazon invested in, acquired and rebranded 8 emerging technology brands for undisclosed amounts which turned out to be disastrous for the company’s portfolio. All of these firms eventually were shut down within a few years of Amazon’s involvement. In 2005, Amazon bought MobiPocket. But after a decade of no updates, Amazon permanently shut down the website and servers in 2016. In 2006, TextPayMe was rebranded to Amazon Webpay but failed to garner attention and eventually axed in 2014. New-York based Touchco was another company mysteriously shut down after the acquisition, their website and YouTube page were stripped of all content in 2010. Similarly, in 2011 Yap, a speech recognition system acquired by Amazon was discontinued by the Amazon team and started over, leading to the development of Alexa. In 2009, Amazon acquired SnapTell, a visual product search technology but was discontinued as the company merged their technology with the Amazon experience. For reasons varying from slow sales and the rest due to the company’s shift in focus, the company has been long known for axing its innovations. In fact, Bezos famously called the e-commerce giant “the best place in the world to fail” in his 2016 shareholder letter. The Balancing Act Despite the setbacks, the company continues to remain a key force in the technology sector. Even though the company has a long list of failed acquisitions and investments, a number of them have worked in favour of the tech giant. As an example, during 2018, the retail giant introduced “Part-finder,” a mobile feature enabling users to use their device’s camera to capture an item of interest. This feature empowered Amazon to conduct a swift scan, establish a match, as well as guide users towards matching items from its catalogue. Interestingly, it was built using technology developed by Partpic, one of the companies Amazon acquired in 2016. Even though it started as an online bookstore, the company has kept up with the market’s pace all these years. As the generative AI has swept industries globally off their feet, the company is making strides in the race. In a recent episode, the company’s current CEO Andy Jassy during last week’s Thursday’s Q2 2023 earnings call, revealed that “Every single one” of Amazon’s businesses has “multiple generative AI initiatives going right now”. While the list of ‘Killed by Amazon’ ventures continues to grow, the company’s interest evolving with the industry’s paradigm shift seems to be working in its favour as a balancing act.
The tech giant has made over 200 investments and 106 acquisitions but the aftermath is not praiseworthy
Amazon has expanded the business throughout the years. But of course not every investment has panned out well for the company. 
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Tasmia is a tech journalist at AIM, looking to bring a fresh perspective to emerging technologies and trends in data science, analytics, and artificial intelligence.