Amazon (NASDAQ:AMZN) to Branch into Education Market with TenMarks Acquisition
NEW YORK – On Thursday, the head of Amazon’s Kindle Tablet project, Dave Kimp, said the company has plans to use the recently acquired technology company TenMarks, for an undisclosed amount, to develop educational material and applications. Kimp’s remarks followed an announcement that Amazon had agreed to purchase TenMarks – a tech startup that offers personalized online math lessons for K-12 students.
In recent years, Amazon has made a big push into schools in an attempt to gain market share from Apple (NASDAQ:AAPL), who have been successful in this sector. As part of Amazon’s strategy, the company has been testing Kindles with hundreds of schools, selling the devices at bulk prices. The company also released Whispercast, a service that helps schools manage and distribute content from one location.
According to reports, the education push is part of a broader effort to expand the use of Kindles, by selling the devices at a loss in the hopes of making money on e-books, and other content.
According to TenMarks co-founder Rohit Agarwal, the company had developed a freemium model which allows teachers to access the company’s service for free and then opt in for paid premium features if they want. Agarwal added ‘going forward, we believe Amazon and TenMarks will create significant innovations in the K-12 arena.’
In Amazon related news, the company also announced on Thursday that they will open a new distribution center in the Tampa, Florida suburb of Ruskin. The new center is expected to employ up to 1,000 permanent workers as well as 1,000 seasonal workers. Hillsborough County Commission Chairman Ken Hagan called the announcement ‘a grand slam for our community,’ while fellow Commissioner Al Higginbotham said it was a ‘major opportunity.’
In recent months, Amazon has been pushing to expand their distribution capabilities in an effort to find the limits of the company’s addressable market. However, the aggressive expansion, especially during this current period of fiscal uncertainty is not without risk for all stakeholders. While the new distribution centers will improve Amazon’s service capabilities they will also increase the company’s operating expenses – for a company that is facing decelerating revenue growth and narrow margins, this is an extremely risky bet.
Shares of Amazon closed up 2.33 percent on Thursday at $ 305.17.