Target dumps Amazon.com to run its own ecommerce operations

A few weeks ago we reported on speculation about a split between Amazon.com and Target. Well, it turns out the two are headed for a divorce. Target this morning announced it will take the reins of its own ecommerce operation starting in 2011. That would be a big loss for Amazon's ecommerce platform business, which runs web operations for third-party retailers.

Here's more from Target's press release:

“Amazon has been an important strategic partner since we re-launched Target.com in 2001, and the strength of Amazon’s technology and fulfillment services has been a contributing factor in Target.com’s success,” saidSteve Eastman, president, Target.com. “However, to deliver a customized multi-channel experience for Target’s guests, we believe it is in Target’s best interest going forward to assume full control over the design and management of Target’s e-commerce technology platform, fulfillment and guest services operations.”

Previously, Target and Amazon extended their contract to 2011. Amazon and Target will continue to work together during the next two years to optimize performance of the existing platform and fulfillment services.

“We are grateful to have been able to work with Target for the last eight years, and we wish Target the very best as they go forward,” saidSebastian Gunningham, Senior Vice President of Seller Services for Amazon.com, Inc.

Target said it plans to launch its own platform ahead of the 2011 holiday season. With Target out, Amazon's biggest known customer for the ecommerce platform business will be U.K.-based Marks & Spencer.

In recent years, Amazon has lost other big enterprise customers, Toys "R" Us and the Borders book chain. Amazon may be shifting to a more middle-market strategy with the ecommerce platform business. The company has been working on a secret project code-named Vitamin C to build ecommerce tools for mid-sized retailers.

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