Amazon to Buy Whole Foods for $13.7 Billion – Annie Gasparro Updated June 16, 2017 7:34 p.m. ET

Whole Foods would continue to operate stores under its brand

Amazon’s $13.7 billion acquisition of Whole Foods Markets makes the online retailer a major player in the grocery sector. WSJ’s Tanya Rivero outlines three things to know about the deal. Photo: Zuma Press

Amazon-Whole Foods Deal: 3 Things to Know

Amazon’s $13.7 billion acquisition of Whole Foods Markets makes the online retailer a major player in the grocery sector. WSJ’s Tanya Rivero outlines three things to know about the deal. Photo: Zuma Press Inc. said on Friday it would buy Whole Foods Market Inc. for $13.7 billion, including debt, instantly transforming the online giant into a major player in the bricks-and-mortar retail sector it has spent years upending.

The acquisition, Amazon’s largest by far, gives it a network of more than 460 stores that could serve as beachheads for in-store pickup and its distribution network. It would make Amazon an overnight heavyweight in the all-important grocery business, a major spending segment in which it has struggled to gain a foothold because consumers still largely prefer to shop for food in stores.

The acquisition of Whole Foods would give Amazon a 460-store network that can also serve as a distribution network. Shown, an Austin, Texas, Whole Foods in 1981, the chain’s first location.

The acquisition of Whole Foods would give Amazon a 460-store network that can also serve as a distribution network. Shown, an Austin, Texas, Whole Foods in 1981, the chain’s first location. Photo: Austin American Statesman/Associated Press

In its drive to conquer consumer spending, Amazon has ventured far from its roots as an online book seller. It is developing its own delivery network, and has become a significant video content creator and cloud data service provider.

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Amazon’s Time-Saving Trick for Groceries: You Drive to Us – Geoffrey A. Manne and Jennifer MacLean 03.28.17 4:58 PM

Amazon is diving deeper into the instant-gratification business, but with a twist: Now you come to them. The company this morning unveiled AmazonFresh Pickup: order groceries online, then drive to an Amazon-run store, where a worker brings them all bagged up to your car.

The first two grocery pickup spots are in Seattle and available only to Amazon employees. When the company finally opens the service to the public, grocery pickup will become yet another Amazon Prime perk. But groceries are more than just another add-on for Amazon. Analysts predict online shopping could amount to 20 percent of all grocery spending within the next decade. This isn’t Amazon’s first attempt at groceries, or a physical store. But in combining the two, the company has hit on a competitive strategy that just might work.

As far back as August 2007, Amazon was testing its first iteration of Fresh, delivering groceries from its vast network of fulfillment centers. But the rollout of that service proved complicated. Amazon started out charging Prime customers $299 per year for the service before settling on $14.99 per month. The biggest challenge for Amazon: Groceries aren’t like any other consumer good.

“It’s notoriously difficult to stay profitable by delivering groceries,” says Jason Goldberg, vice president of commerce at the digital marketing company Razorfish. “Perishables must arrive when a consumer is home to receive them and put them in a refrigerator.”

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Carnage at a prison in the Amazon – The Economist Jan 7th 2017 

A massacre in Manaus shows that competition among gangs is increasing

THE rampage lasted 17 hours. By the end of it, 56 inmates of the Anísio Jobim prison complex in Manaus, a city set amid the Amazon rainforest, were dead. Many had been decapitated; severed arms and legs were stacked by the entrance to the jail, known to most as Compaj, a contraction of its full name. Luís Carlos Valois, a judge who negotiated an end to the violence on January 2nd, called the hellish scene “Dantesque”. It was Brazil’s bloodiest prison riot in a quarter-century.

Only the death toll makes the carnage at Compaj stand out. Brazil’s prisons erupt often. Last year 18 inmates died in clashes between gangs at prisons in the northern states of Roraima and Rondônia. In Pernambuco, a north-eastern state whose prisons are overstuffed even by Brazilian standards, violent deaths are a frequent occurrence. In January 2016, 93 prisoners broke out of two of the state’s jails.

Prisons are both hellholes and headquarters for Brazil’s most powerful criminal gangs. The country’s prison population of 622,000, the world’s fourth-largest, is crammed into jails built to hold 372,000 inmates. Compaj houses 2,200, nearly four times its capacity. Guards often do little more than patrol the perimeters, leaving gangs free to manage far-flung criminal operations via mobile phones.

The riot at Compaj suggests that prison violence—and the behaviour of the gangs behind it—is entering a new phase. Officials in the state of Amazonas say members of Família do Norte (Family of the North, or FDN), which controls drug trafficking in the Amazon region, organised the Compaj massacre. Having gained control over much of the prison, the gang sought to wipe out opposition from Primeiro Comando da Capital (First Command of the Capital, or PCC), a larger rival based in São Paulo, a south-eastern state.

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Amazon Is Considering Drone-Friendly Floating Warehouses – Don Reisinger Updated: Dec 29, 2016 10:50 AM PST

Amazon might soon take flight in more ways than one.

The e-commerce giant has been awarded a patent that describes a logistics technology it calls “airborne fulfillment center (AFC).” The AFC is essentially in airship that’s capable of flying at altitudes of 45,000 feet or more that would house items the company sells through its online marketplace. In the patent, Amazon describes a method by which drones would fly into the warehouse, pick up the items they need to deliver, and then deliver those items to the customer’s home.

Amazon (amzn, -0.89%) filed for the patent in 2014. While it was actually awarded in April, it wasn’t discovered until Wednesday by CB Insights tech analyst Zoe Leavitt.

Over the last few years, Amazon has been working on drone technology through its Prime Air initiative with an aim on delivering products to customer homes without relying upon logistics companies to do it. Earlier this month, Amazon successfully completed its first drone delivery in the U.K. The company plans to expand its drone testing in 2017 in hopes of eventually relying on the unmanned aerial vehicles to deliver lightweight packages to homes.

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Amazon’s Real Future Isn’t Drones. It’s Self-Driving Trucks – DAVEY ALBA. 12.20.16. 1:59 PM


Why 2016 Was a Watershed Year for Tech – By  Christopher Mims Dec. 18, 2016 12:15 p.m. ET

Companies sparred with governments globally as they faced criticism, unprecedented scrutiny has introduced Amazon Go stores without cashiers.ENLARGE has introduced Amazon Go stores without cashiers. Photo: jason redmond/Reuters

As 2016 nears an end, five of the seven most valuable companies in the world—including the three most valuable—are technology companies. Beyond their worth in the eyes of investors, Apple Inc., Google parent Alphabet Inc., Microsoft Corp., Inc., and Facebook Inc. also are powerful forces in everyday lives. Tech can seem inescapable.

That helps explain why 2016 also was a difficult year for many of these companies. Collectively, they faced sharp criticism and unprecedented levels of scrutiny while clashing with governments around the world—including the future U.S. president.

It’s no coincidence, for example, that digital-ad spending in the U.S. has been projected to eclipse spending on TV ads in 2016, while Facebook battled concerns about its influence over politics and its role in spreading fake and distorted news. Those developments are two sides of the same coin—Facebook’s power.

Or take Amazon’s new cashier-free stores, which instantly became symbols for how automation “kills” jobs. Amazon has only a handful of physical stores, and doesn’t plan to open its first Amazon Go store to the public until next year, yet its dominance in online retail made this a source of much public concern.

Google had a banner year for both revenue and profit. One price of that real-world influence is three sets of antitrust charges by European regulators who view the company as a sort of American colonial power. The latest, issued in July alongside additional charges piled onto a previous case, accused Google of “strong-arming” Android handset makers into shipping their devices with Google’s search as the default.

In 2016, tech executives overwhelmingly backed the woman who lost the race for president, while the man who won attacked them publicly and sometimes personally. Many of the parties involved met last week in Trump Tower, apparently reaching an uneasy truce. But many in tech still view the next four years warily, concerned by Donald Trump’s views on issues such as free trade and immigration.

That this exchange happened at all speaks to the cultural as well as the economic dominance of tech companies. At stake wasn’t just where iPhones would be manufactured, but whether globalization is a net economic benefit or a scourge to America’s middle class. The tech industry has come to espouse a common culture of disruption, or progress at all costs, and Trump’s election was in some respects a rebuke to that ideology. The outcome of this struggle will have implications for everything from how friendly regulators are to disruptive technologies like self-driving vehicles to how willing they are to support the transition to clean energy.

The year brought little relief from an ongoing drought in tech companies going public. This was notable because in an age when just about every startup describes itself as a tech company, a drought of tech IPOs means a drought of IPOs.

A handful of enterprise tech companies did go public, but the really big fish, including Uber Technologies Inc. and Airbnb Inc., remained on the sidelines. Like others, I initially viewed their reluctance to IPO as admissions that their business models weren’t fit for the critical gaze of public investors. But the more I learned about these companies, the more I realized they weren’t going public because, quite simply, they didn’t have to.

These companies have access to virtually unlimited amounts of capital, in part as a result of capital flooding the globe following the 2008 financial crisis. Seeking better returns, institutional investors have piled into these companies’ later-stage private rounds, lifting their valuations. One bright spot for 2017 looks to be a planned IPOfrom Snap Inc., which is a notable exception among holdouts in the billion-dollar startup club.

What of Apple, the most valuable of them all? Following a record holiday quarter in 2015, Apple saw its first decline in annual revenue since 2001. Some analysts declared that this time, the company was truly, finally out of ideas. This despite the apparent success of the Apple Watch and the potential for Apple’s AirPods to become a new class of wearable computer.

This matters because Apple has become synonymous with America’s power to innovate, as China moves from making things for others to creating brands of its own.

As the world’s most valuable company Apple has become a standard-bearer for America’s innovation exceptionalism. For Apple to falter is for America to falter.

And that was the real theme of tech in 2016: A raft of companies that were underdogs and scrappy upstarts just 20 years ago are now the incumbents, the budding monopolists, the ones in charge. We learned to fear and rely on them in equal measure, let them pervade our lives even as we struggled with their omnipresence. And in their denials, spin and public pronouncements, for the most part they just didn’t seem quite ready to acknowledge their importance.

Write to Christopher Mims at

Amazon To Open Convenience Store With No Lines – MERRIT KENNEDY December 6, 2016 4:59 PM E.T.


Reed Saxon/AP

Amazon says it is opening a new food and convenience store that doesn’t have a checkout line.

Instead, the company envisions customers at the Amazon Go store picking up whatever they want off the shelves — then simply walking out with it. The items are automatically billed to their Amazon accounts.

Details about how the technology actually works are sparse. “We used computer vision, deep learning algorithms and sensor fusion much like you’d find in self-driving cars,” a narrator says in a video from Amazon. “We call it Just Walk Out Technology.”


The 1,800-square-foot retail store in Seattle will offer ready-made meals and some grocery basics, according to the website. The company says it is testing the store with its own employees and plans to open to the public in 2017.

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HP Enterprise to Spin Off, Merge Services Business – By Don Clark and  Tess Stynes Updated May 24, 2016 7:50 p.m. ET

Deal with Computer Sciences creates IT-services provider with $26 billion in annual revenue

Hewlett Packard Enterprise is the former H-P business that focuses on corporate technology customers.

Hewlett Packard Enterprise is the former H-P business that focuses on corporate technology customers. — Photo: Bloomberg News

Hewlett Packard Enterprise Co. plans to spin off most of its technology services operations and merge them with those of Computer Sciences Corp. , in an $8.5 billion transaction that marks HP Enterprise’s latest adjustment to a shifting landscape that is roiling the market for corporate technology.

HP Enterprise will shed a business that accounts for roughly 100,000 employees, or two-thirds of the Silicon Valley giant’s workforce.

The deal, a blockbuster follow-up to the breakup of Hewlett-Packard Co. last fall, will create a corporate technology services specialist that will be led by Computer Sciences executives and have roughly $26 billion in annual revenue, the companies said. The remaining HP Enterprise operations will concentrate mainly on software, server systems, networking and storage hardware.

HP Enterprise said its estimate of the value of the services unit includes a 50% stake in the new venture created with Computer Sciences, valued at about $4.5 billion, as well as a cash dividend of $1.5 billion and the assumption by Computer Sciences of about $2.5 billion of liabilities.

The move is evidence of ongoing turmoil in the corporate computing market as business spending tightens and traditional data centers give way to cloud computing. HP Enterprise faces increasing competition from cloud-computing vendors including Inc. and Microsoft Corp. that sell metered access to raw computing power over the Internet. Customers must decide whether to opt for cloud services, maintain conventional data centers, or build their own private cloud-like facilities—a business especially targeted by HP Enterprise.

The combined spinoff and merger, which will focus HP Enterprise more tightly on hardware sales, represents a doubling down by Chief Executive Meg Whitman on a breakup approach to the shifting landscape in contrast to the merger strategy taken by Dell Inc. and EMC Corp.

“We are creating two great companies that are going to be more focused on a narrower set of businesses,” Ms. Whitman said in an interview.

Operations affected by the deal include technology outsourcing and other businesses that were part of Hewlett-Packard’s purchase of Electronic Data Systems in 2008 for $13.9 billion.

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Amazon to Expand Private-Label Offerings—From Food to Diapers – By GREG BENSINGER Updated May 15, 2016 8:03 p.m. ET

The first of the brands could appear on the company’s website in coming weeks

The first of Amazon’s new private-label brands could start appearing online in the coming weeks. Shown, a 1.1-million-square-foot Amazon fulfillment center in Tampa, Fla.

The first of Amazon’s new private-label brands could start appearing online in the coming weeks. Shown, a 1.1-million-square-foot Amazon fulfillment center in Tampa, Fla. —  Photo: Robert Galbraith/Reuters Inc. in the coming weeks is set to roll out new lines of private-label brands that will include its first broad push into perishable foods, according to people familiar with the matter.

The new brands with names like Happy Belly, Wickedly Prime and Mama Bear will include nuts, spices, tea, coffee, baby food and vitamins, as well as household items such as diapers and laundry detergents, these people said.

The first of the brands could begin appearing on Amazon’s namesake site as soon as the end of the month or early June, said one of the people.

Amazon has been working to develop the new private-label lines for several years and had approached branding consultants and manufacturers including TreeHouse Foods Inc., The Wall Street Journal reported last year.

An Amazon spokeswoman declined to comment.

Consumers have warmed to private-label brands since the days of generically named products sold in plain white packaging. Today, retailers from Wal-Mart Stores Inc. to Sephora to Dean & DeLuca sell a range of in-house brands that some may even view as higher quality.

Store brands reached $118.4 billion in U.S. sales last year, up about $2.2 billion from the prior year, according to the Private Label Manufacturers Association.

Amazon’s latest lineup is aimed at winning sales in niches with generally higher profit margins, as well as giving the Seattle retailer a potential edge in crafting new products ahead of its own vendors.

“Amazon is ‘carpet-bombing’ the market with new products,” said Bill Bishop, chief architect of brand consultancy Brick Meets Click. “Private label allows them to test out new prices and distinctive flavors with less risk.”

Mr. Bishop said private-label goods boast higher profit margins than name brands because companies save costs on marketing and brand development. And with Amazon’s rich trove of data, it may better predict which products will sell well to its customers.

Amazon only will offer the private-label products to members of its $99-per-year Prime membership, this person said, potentially giving the program a boost.

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Amazon Launches YouTube-Like Video Service – By GREG BENSINGER Updated May 2016

Amazon account holders can upload original or their licensed videos to the new Video Direct service

 Screen Shot 2016-05-11 at May 11, 2016 11.01 Inc. is intensifying its rivalry with Alphabet Inc.’s Google with a new ad-supported video service that resembles YouTube by letting anyone upload clips.

As of Tuesday, Amazon account holders can upload original or their own licensed videos to the Video Direct service, the Seattle-based online retailer said. Such users can designate whether their videos are free to everyone, available to rent or own, offered through a subscription channel, or behind Amazon’s $99-a-year Prime paywall.

The new service broadens Amazon’s effort to transform itself from a dominant retailer to a multimedia powerhouse, which now offers big-screen movies and television series from the likes of Woody Allen.

Amazon has been bulking up its streaming video offerings with original content and exclusive deals with providers such as HBO and Epix. Last month, Amazon dialed up competition with Netflix Inc. by offering its streaming video service as a month-by-month subscription that is a dollar cheaper than its rival.

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