Amazon acquires online shoe fetishist
'Zappos and Amazon sitting in a tree...'
Amazon today announced that it would acquire shoes, clothing, bags, and accessories etailer Zappos.com in a stock-swap deal that will total approximately $847m.
Although the deal is being widely reported as an acquisition, Zappos CEO Tony Hsieh doesn't see it exactly that way. In an extensive letter to his employees on the Zappos blog, Hsieh explained:
Over the next few days, you will probably read headlines that say "Amazon acquires Zappos" or "Zappos sells to Amazon". While those headlines are technically correct, they don't really properly convey the spirit of the transaction. (I personally would prefer the headline "Zappos and Amazon sitting in a tree...")
Translated into non-Zappos-speak, what Hsieh means is that Zappos, though wholly owned by Amazon, will continue as a separate, independent division, retaining its current management and employees, along with its current headquarters in Las Vegas, Nevada.
As Hsieh put it in a canned joint Amazon/Zappos statement, "We will continue to build the Zappos brand and culture in our own unique way."
In the same statement, head Amazonian Jeff Bezos said, "We see great opportunities for both companies to learn from each other and create even better experiences for our customers."
Bezos also taped a video for Hsieh to provide to Zappos employees who might be worried about being displaced or made irrelevant in the acquisition. In the video, Bezos mirrors Zappos.com's custom-centric culture, saying "When given the choice of obsessing over competitors or obsessing over customers, we always obsess over customers."
Under the terms of the agreement, Amazon will provide the 100-plus Zappos shareholders and investors with approximately 10 million shares of Amazon common stock worth about $807 million in exchange for their existing Zappos shares. Amazon will also provide Zappos employees with $40 million in cash and restricted stock units.
The acquisition is expected to close in the fall of this year. ®
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