Once a Shark Tank reject product, news is swirling that smart doorbell maker Ring has been acquired by Amazon for $1 billion (a little more than the $7 million CEO and founder Jeff Siminoff valued the company at when he presented it to ABC’s celebrity panel of investors).
The move, on the surface, is just another drop in the bucket for Amazon—a company that is quickly creeping into the smart home products space with its Echo-related products and more. But there are a number of reasons why this acquisition makes perfect sense for the ecommerce giant.
First and foremost, the product will likely integrate into Amazon’s in-home delivery service announced last year. At the time of that announcement, Amazon unveiled a Cloud Cam product that essentially is an indoor security camera. Coupled with their Amazon Key delivery service, customers essentially give access to Amazon delivery personnel to come into their home and drop a package off inside rather than leaving it out on the front porch where it can be spotted and stolen.
What the Cloud Cam and Key system were missing, though, was a way to view who’s at the door prior to letting that delivery person in. While checks would presumably be in place, there’s the added peace of mind that the Amazon Key system could integrate Ring doorbells to complete those checks before unlocking the consumer’s front door.
The second reason why this announcement and the timing of it is not entirely surprising from Amazon’s standpoint is the fact that Nest—a company owned by Google parent Alphabet Inc.—is set to launch its first smart doorbell in March. So, rather than try to develop something new in-house, Jeff Bezos did what he does best and opened up his wallet to acquire a company that’s well established in the space and made it his own.
Amazon had already acquired another smart doorbell and connected camera company, Blink, just a few months ago. But you can never own too much of a thing, right?