Amazon.com Adds Auctions; Buys 50% Stake in Pets.com

The biggest player in online retailing is entering the auction game, not to mention the pet-care game. Online bookseller Amazon.com (Nasdaq: AMZN) announced Sunday that it is launching a person-to-person auction service to compete with the likes of eBay (Nasdaq: EBAY). And today, Amazon.com announced it has agreed to buy a 50 percent stake of Pets.com, which sells a wide variety of pet-care products online.

Amazon.com stock was up more than 10 points to more than 150 in early trading today, while shares of other companies that run auction sites, like eBay, OnSale and Cybershop, were down.

Amazon.com Reportedly Signs Up Smaller Businesses

Amazon.com’s announcement about the auction house didn’t go into specifics about when the new area would launch or how comprehensive it would be. But the Wall Street Journal reported that Amazon.com CEO Jeff Bezos has written a draft letter to customers that says the new auction service will let people “buy and sell virtually anything at Amazon.com — rare books and signed first editions, rare music, vintage toys, antiques, sports memorabilia and collectibles of all kinds.” According to the Journal, the letter will be posted on Amazon.com in the next week or two.

The Journal added that people familiar with Amazon.com’s plans said the company has signed up at least 117 smaller business that will run auctions on the Web site, including 11 companies specializing in collectibles, 9 that sell electronics and photo equipment, and 24 that sell clothing or jewelry.

Amazon.com Keeps Branching Out

The purchase of the stake in Pets.com, which sells pet products including food, health aids, grooming devices, feeders and furniture, is just Amazon.com’s latest move to branch out into other categories. Amazon.com joined with venture capital firm Hummer Winblad Venture Partners to fund Pets.com’s first round of financing.

“Pets.com has a leading market position, and its proven management team is dedicated to a great customer experience, whether it’s making a product like a ferret hammock easy to find, or help in locating a pet-friendly hotel,” Bezos said.

Amazon.com’s latest moves are a clear sign that the company is aiming to turn into the first and last stop for online consumers. Amazon.com has recently entered other categories by buying a 46 percent stake of online drug retailer Drugstore.com, which is prominently promoted on Amazon.com, and setting up a co-branding agreement with computer company Dell.