What's Amazon's Next M&A Target?

NEW YORK ( TheStreet) -- Now that Amazon ( AMZN) has acquired Quidsi, owner of Diapers.com, what are some other potential M&A targets?

Amazon purchased Quidsi, which also operates the newly launched Soap.com, for $500 million in cash and assumed $45 million in debt. The deal is expected to close by the end of the year.

The Internet retailer has been on an M&A kick, purchasing online footwear retailer Zappos.com back in 2009 for $847 million.

What's Amazon's next acquisition target?

Drugstore.com
Blue Nile
OpenTable
Netflix

Amazon also recently bought Woot.com, a site that offers daily discounts, and has agreed to purchase BuyVIP, a fashion site.

Shutterfly ( SFLY), deal site Groupon, private-sale sites like Gilt Group and Ideeli, and auto parts site USAutoparts.net, have all been cited as potential takeover targets.

In light of all this, here's a look at other companies that could be on Amazon's radar....

Blue Nile

High-end jewelry e-retailer, Blue Nile ( NILE), could be an attractive acquisition.

With a market cap of $686.8 million, Blue Nile has been quickly expanding into the mobile market.

Blue Nile Does Diamonds on iPhone

In its third quarter, Blue Nile reported an 8% jump in profit to $2.8 million, or 19 cents a share, a penny higher than forecasts. Sales grew nearly 1% to $67.5 million.

The company also forecast an increase in sales between 3% and 12% in its fourth quarter. Blue Nile is looking for profit in the range of 41 cents to 46 cents a share during the quarter.

Drugstore.com Drugstore.com ( DSCM) has long been rumored as a potential takeover target for Amazon and would make a natural fit in its pharmacy and vitamin business.

The publicly traded e-retailer, which has a market cap of $178.1 million and has been around since 1998, sells health, beauty, vision and pharmacy products.

Last week Drugstore.com reported third-quarter earnings of $2.4 million, or 2 cents a share, compared with a loss of $1.6 million, or 2 cents, in the year prior. Sales surged 23% to $108.8 million from $88.6 million. Analysts forecast earnings of 3 cents a share on revenue of $108.9 million.

In the same category, another potential takeover is Vitacost.com ( VITC), an Internet retailer with a market cap of $179 million that sells health and wellness products.

Netflix

Netflix ( NFLX) takeover chatter by Amazon has popped up sporadically over the last several years.

But analysts have continuously dismissed these claims. "Amazon would not acquire Netflix for its by-mail business, which will eventually go away," Needham analyst Charles Wolf, said back in May, when the most recent round of gossip surfaced.

Janney Capital Markets analyst Shawne Milne also says Amazon missed the boat on a Netflix deal.

But as Netflix improves its streaming business, and declared during its third-quarter conference call that it is moving from a DVD-by-mail company to a streaming company, it could become a more attractive target for Amazon.

Amazon, itself, has a streaming pay-per-view service for new releases, but has found it difficult to compete with rivals like Apple's ( AAPL) iTunes.

Elsewhere in the movie segment, a deal with Coinstar ( CSTR), owner of Redbox DVD kiosks, is also popping up as a possibility. Coinstar announced that it is talking with potential partners for a streaming service to compete with Netflix.

"We think a partnership with Coinstar would be mutually beneficial, as it would allow Amazon to leverage its large customer base and to compete head-to-head with Netflix," Wedbush analyst Michael Pachter wrote in a note.

OpenTable

OpenTable ( OPEN) is in the midst of a major growth spurt. The online restaurant reservation platform reported better-than-expected third-quarter profit, as more restaurants utilize the service.

During the quarter, OpenTable earned $3.8 million, or 16 cents a share, compared with $896,000, or 4 cents, in the year-ago period. Excluding items, the company actually earned 23 cents a share.

Revenue surged 44% to $24.5 million. Its installed restaurant base grew 31% to 15,246, while seated diners surged 54% to 15.9 million.

OpenTable may not fit perfectly in Amazon's business model, but the company could utilize the clod-based business model in other areas of retail.

In light of all this, which company do you think is most likely on Amazon's radar? Take the poll below to see what investors think....

What's Amazon's next acquisition target?

Drugstore.com
Blue Nile
OpenTable
Netflix

--Written by Jeanine Poggi in New York.

>To contact the writer of this article, click here: Jeanine Poggi.

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