Perhaps nothing speaks clearer to Amazon’s acquisition strategy than Jeff Bezos’ 1997 shareholder letter that has been attached with every succeeding annual shareholder letter. The core parts of this letter include a relentless view for the long term, a lean culture, and an obsession over customers.
Bezos notes the sole focus of any investment is to extend and solidify Amazon’s market leadership position. He continues to emphasize the importance of balance growth with long-term profitability where he will choose an investment in scale over meeting any short-term Wall Street metric. This naturally sets a tone for acquisitions to take time to bear fruit in the Amazon ecosystem.
Consistent with Amazon’s public perception of a conservative acquirer that does not pay large sums is its lean culture. Bezos notes the importance of building a cost-conscious culture at Amazon. This is evident in many ways: Amazon doesn't serve free lunches to employees, Bezos upgraded to a Honda Accord after becoming a billionaire, and employees using doors as desks in 2013. Such frugality in the company’s culture brings greater scrutiny to any large purchase price the company makes on an acquisition.
Bezos’ obsession over customers is clearly evident from the consumer surplus Amazon stores provide with its low prices. Constantly working backward from the customer’s needs has been a strategy for identifying future investments internally and externally for Amazon. This has been a key factor that Bezos addressed when Amazon acquired Twitch and one Whole Foods CEO John Mackey noted as an opportunity to improve upon through Amazon’s acquisition.