Amazon.com Pumps $60 Million into Kozmo.com
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Following months of speculation, Amazon.com ended the suspense by taking a $60 million stake in Kozmo.com, an e-commerce firm that delivers movies, books and more to customers' doorsteps within an hour.
Also, in exchange for warrants to purchase additional shares in Kozmo.com, Amazon.com AMZN sealed a three-year strategic alliance with Kozmo.com, in which Amazon.com will begin offering a one-hour delivery option to its customers -- the main factor that attracted the leading online bookseller to make the play.
The one-hour delivery option, in which couriers streak via bicycle to their destinations, will be launched at a later date. Amazon.com customers will then be able to choose Kozmo.com as a one-hour fulfillment and delivery option for certain book, music and toy orders. Kozmo.com currently serves the New York, Boston, Washington, D.C., San Francisco, Seattle and Los Angeles markets.
"In a short time, Kozmo.com has developed a strong track record for meeting a unique customer need, and this agreement provides us a one-hour delivery option for the types of products that customers may want immediately."
The deal was the latest in what has been a series of investments in popular e-commerce businesses for Amazon.com, which has been working to become the Web's version of a "category killer" superstore.