Amazon said on Wednesday that it is shutting down Quidsi, one of its largest-ever acquisitions, which runs six shopping sites, including Diapers.com, Soap.com and Wag.com.
Amazon is shutting down Diapers.com — whose founder is now at war with Amazon
The site was part of Amazon’s fourth-largest acquisition back in 2011.
Jason Del Rey has been a business journalist for 15 years and has covered Amazon, Walmart, and the e-commerce industry for the last decade. He was a senior correspondent at Vox.
The shutdown will result in layoffs of 263 people, according to a New Jersey state filing. But Bloomberg, which first reported the news, said some of these employees would be able to apply for new positions at Amazon.
In a statement, an Amazon spokesperson blamed the shutdown on profitability issues.
“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,” the statement said. “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.”
The spokesperson did not say when the sites are going offline.
Amazon bought Quidsi almost six years ago to the day (not seven, like the statement says) in a deal valued at around $545 million — the company’s fourth-largest purchase as of now. The acquisition was the culmination of an intense price battle between the companies that were threatening to push Jersey City-based Quidsi out of business.
Quidsi’s co-founder and then-CEO Marc Lore worked at Amazon for a few years following the deal, but it is an open secret in the industry that he did not enjoy his time there. He went on to launch an Amazon competitor, Jet.com, in 2015, which he sold last year to Walmart for $3.3 billion.
Lore now runs all U.S. e-commerce operations for Walmart, Amazon’s biggest competitor stateside. Last week, he told me in an onstage interview at Code Commerce that his long-term goal for Walmart is to win the U.S. e-commerce battle. I asked him if that means being the No. 2 player behind Amazon, since the Seattle giant has such a huge lead.
“Win means win,” Lore said.
So is there a chance that Amazon’s decision was driven by more than what the public statement says — either some personal vendetta or some level of gamesmanship? That would seem like a long shot for such a data-focused company. But it has been easy to find people who know both companies well that won’t rule out the possibility.
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This article originally appeared on Recode.net.
