Chinese market makes room for Amazon

Amazon.com gained another global foothold with the $75 million acquisition of Joyo.com, the largest online retailer of books, music and videos in China.

Amazon said Thursday that Joyo will become its seventh global site, and will allow it to service more than 80 million online users in China.

The $75 million price tag includes about $72 million in cash and the assumption of employee stock options. Amazon expects the transaction to close in the third quarter.

Amazon doesn't expect the deal to have a significant impact on net sales or operating profit in the third quarter or full-year fiscal 2004, told The Street.

Amazon is making its entry into the fast-growing Chinese market after several months spent searching for a suitable partner or acquisition target.

Joyo's principal activities are the sales of books, music, movies and toys on the internet at discount prices.

Analysts believe the Chinese deal is part of Amazon's efforts to maintain rapid revenue growth, according to BBC.

Officials say the acquisition will not result in any job losses at Joyo.com, a company launched in 2000 by the British Virgin Islands Company, which operates the site for its subsidiaries and affiliates.

"We are very pleased to be entering the Chinese market with Joyo.com," Jeff Bezos, Amazon.com founder and CEO, said in a statement. "In a relatively short time, Joyo.com has established itself as the leading online destination for books, music and videos in China, and we're happy to be part of one of the world's most dynamic markets."

According to figures provided by the China Internet Network Information Center (CNNIC), online shopping in the country is expected to explode in the coming year, by 190 percent. Its 14th Statistical Survey report shows the number of Internet users have grown to 87 million, 31 million of which are broadband users, informs Jupitermedia.