Amazon Snaps Up Zappos.com for $847M

Online commerce giant Amazon.com said today that it’s buying apparel and footwear e-tailer Zappos.com.

The move will see Amazon (NASDAQ: AMZN) shelling out about $807 million in stock for Zappos options and warrants. Amazon also said it would pay Zappos employees $40 million in cash and restricted stock.

The deal, subject to closing conditions including regulatory approval, is expected to close in fall.

For Amazon, the purchase gives it control of a fast-growing online retailer well regarded for its customer service and its embrace of Web 2.0 technologies. Company’s employees routinely use Twitter, for instance, and regularly respond to customer comments on the microblogging service.


“Zappos is a customer-focused company,” Amazon CEO Jeff Bezos said in a statement. “We see great opportunities for both companies to learn from each other and create even better experiences for our customers.”

There are other benefits to Amazon, as well.

“We were strategic in choosing our warehouse location due to its proximity to the UPS Worldport hub in Louisville [Ky.],” Zappos CEO Tony Hsieh wrote in a letter to employees. “Amazon does not have any warehouse locations that are closer to the Worldport hub. There is the possibility that they may want to store some of their inventory in our warehouse or vice-versa.”

Amazon said that the Zappos brand will remain independent and that Zappos’s management team will stay with the company after the deal is finalized. Zappos will also continue to be based out of Las Vegas.

“We are joining forces with Amazon because there is a huge opportunity to utilize each other’s strengths and move even faster towards our vision of delivering happiness to customers, employees and vendors,” Hsieh said in a statement. “We will continue to build the Zappos brand and culture in our own unique way, and we believe Amazon is the best partner to help us do this over the long term.”


In his e-mail to Zappos employees, Hsieh reiterated that little would change as a result of the acquisition.

“We plan to continue to run Zappos the way we have always run Zappos — continuing to do what we believe is best for our brand, our culture, and our business,” he wrote.

“We think that now is the right time to join forces with Amazon because there is a huge opportunity to leverage each other’s strengths and move even faster towards our long-term vision,” Hsieh added. “For Zappos, our vision remains the same: delivering happiness to customers, employees, and vendors. We just want to get there faster.”

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