Amazon.com Pumps $60 Million into Kozmo.com

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.

Already, barnesandnoble.com (BNBN) offers same-day delivery of some orders in New York.


“We’re always looking for new ways to offer more choices to our customers,
whether it’s new products or new delivery options,” said Joe Galli, Amazon’s
president and chief operating officer.

“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.

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