Amazon is shutting down a division it bought for $545 million, escalating a feud between Jeff Bezos and his Walmart rival
Amazon purchased Quidsi for $545 million back in 2010. In a statement, Amazon says that the shutdown is simply because it couldn't get the company to profitability in the intervening years. The products offered by Quidsi will be stocked on Amazon.com, while Quidsi's programmers will work on the AmazonFresh grocery service.
Notably, the shutdown of Quidsi also carries some personal weight for Amazon CEO Jeff Bezos and his longtime rival Marc Lore, currently the CEO of US Commerce for Walmart.
The acquisition of Quidsi came after a vicious price war between Lore's companies and Bezos' Amazon. Eventually, Quidsi faced an inability to raise more investment capital, and Lore sold the company to Amazon. Lore and Quidsi cofounder Vinit Bharara made a lot of money in the deal, but left Amazon in 2013, not long after their contractual mandate to work at the company post-acquisition ended.
Lore went on to found Jet.com, a shopping site with the explicit goal of outpacing Amazon in terms of innovation. Jet raised $225 million in venture capital cash, but was said to be running out of money not long before Walmart swooped in to buy it for $3 billion in August 2016.
Now, Lore is in charge of helping the titanic Walmart better stave off Amazon's relentless march on retail and commerce, putting him at loggerheads with Bezos yet again. And while there are, apparently, good business reasons why Amazon shut down Quidsi, it's still got to be a splinter in Lore's eye that Bezos is shutting down the company he built.
Here's Amazon's full statement on the Quidsi shutdown:
"We have worked extremely hard for the past seven years to get Quidsi to be profitable, and unfortunately we have not been able to do so. Quidsi has great brand expertise and they will continue to offer selection on Amazon.com; the software development team will focus on building technology for AmazonFresh.