Amazon moves up market

Amazon.com is expanding its empire yet again, taking a stake in the all-around Web merchant Ashford.com, spokespeople for the two companies said.

Amazon.com is expanding its empire yet again, taking a stake in the all-around Web merchant Ashford.com, spokespeople for the two companies said.

Under a deal to be announced today, Amazon.com will pay $10 million (£6.250 million) for a 16.6 percent stake in luxury goods merchant Ashford.com. The agreement, which starts immediately, will run through Dec. 31, 2000, the companies said.

The alliance with Ashford is the latest move by Seattle-based Amazon to build itself into an Internet superstore, offering shoppers virtually anything that they'd like to buy in one online location.

Starting Wednesday, shoppers will be able to link to Ashford's site right from Amazon's home page. Amazon also will feature Ashford in some of its promotions, such as the brochures found in the boxes that Amazon products are delivered in.

Ashford will have access to Amazon's 13 million customers. The company plans to target those shoppers it feels are interested in buying high-end goods, said Ashford chief executive Kenny Kurtzman.

For instance, they are betting that an Amazon customer who is willing spend £1,250 on a Sony 36-inch television, may also be willing to buy a £2,187 Rolex watch or £4,437 Whitney Boin diamond necklace.

"This is a great deal for Ashford.com that will help them pull away from the pack of other luxury good retailers online," said Lisa Allen, senior analyst at online consulting firm Forrester Research.

"They will be able to tap the Amazon promotional machine and its monster database," she said. "I'm sure Ashford will slice and dice that Amazon database to bring to the top the most affluent customers."

Amazon has yet to turn a profit, but the 4-year-old company has spent freely in the last 18 months to expand from books to music, videos, auctions, toys, electronics, home improvement goods, software and greeting cards.

It also has invested in online companies where it sees big growth opportunities, with stakes in drugstore.com, Pets.com and Web supermarket HomeGrocer.com.

Ashford, which is based in Houston, sells diamonds, new and vintage watches, designer jewelry, fragrances, bath and body products, leather accessories, ties, scarves, sunglasses and quality pens.