Thursday, March 1, 2018

Amazon Buys Ring

With crushing competition looming, Ring, the
home security device company that has had
a near-monopoly on the market for video doorbells,
is selling itself to Amazon for a reported $1.1 billion.
“I’m beyond happy,” said Ring founder Jamie Siminoff
about the deal, “incredibly so.”

Siminoff declined to elaborate before the transaction
officially closes. But Amazon is expected to treat Ring
as it has similar acquisitions like Zappos and Audible,
integrating some elements of Ring with other Amazon-
owned products like its virtual digital assistant, Alexa,
which already transmits commands to Ring’s products.
The Seattle giant will mostly allow Ring to operate
independently, according to a Ring spokesperson.
Siminoff will stay on as CEO of Santa Monica-based Ring.

The deal will not make Siminoff, 41, a billionaire. Ring has
burned through multiple financing rounds, bringing its
investment capital to $209 million and diluting Siminoff’s
ownership stake to 10%. The Amazon deal voids a $300
million venture round Siminoff was set to close in March,
which would have valued the company at $1 billion.

The deal marks a handsome payday for Shaquille O’Neal,
Ring’s pitchman, who struck an agreement in 2016 for an
equity stake in the company in exchange for his
appearances alongside Siminoff in Ring’s TV and online
Commercials.

As recently as last year, Ring had a 97% share of U.S.
video doorbell sales, according to market research firm
NPD Group. The devices let users see video broadcast
through a tiny camera in the doorbell, using an app on
their phone. But this year, a half-dozen copycat doorbells
are hitting the market, some introduced by legacy security
companies like ADT and others by brands owned by
Google and Amazon. In December, Amazon bought Blink,
a maker of wireless home security cameras, and was
planning to introduce a $99 video doorbell in the coming

months, undercutting Ring’s lowest-priced doorbell by $80.

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