In its latest deal to invest in Amazon, AOL is opening the door to a future buyout of the internet retailer.
$100m investment opens door to Amazon buyout
Under terms of an agreement to invest $100m in Amazon.com, AOL is allowed to make a friendly bid to acquire the Seattle-based online retailer if it so desires, according to documents filed with the US Securities and Exchange Commission.
While the agreement prevents AOL from making a bid to acquire management control or ownership of Amazon over the next two years, it contains a clause that would permit a friendly bid to move forward.
The clause prohibits AOL from going ahead with an acquisition or making a public announcement of its acquisition plans without the approval of Amazon.com's board of directors.
AOL has invested the $100 million as part of an expanded marketing pact between the online retailer and the ISP. The two companies plan to jointly develop online shopping services that will be rolled out in time for the year-end shopping season in 2002, according to a statement.
In addition, AOL and Amazon.com will collaborate on the development of other e-commerce initiatives, including customer authentication and wallet services.
In return, Amazon.com will promote AOL as its exclusive ISP partner and will make AOL software available for download from the Amazon.com. The online retailer will also offer AOL service subscriptions alongside products and services from AOL's parent company, AOL Time Warner, on its website.