Amazon Buys Zappos for More Than $900 Million
BY Max Chafkin
Tony Hsieh, CEO of online shoe retailer Zappos, announced on Twitter that he had agreed to sell the privately-held company to Amazon.
Zappos, the online shoe seller that has won renown for its stellar customer service and feel-good employment practices, announced that it was selling itself to e-commerce rival Amazon.com. If the deal gets the SEC's blessing, Zappos would become a subsidiary of Amazon and Zappos shareholders would receive Amazon stock worth roughly $900 million.
CEO Tony Hsieh, a serial entrepreneur who provided the company with its initial investment and who has led the company for most of its 10-year history, emphasized in a letter to employees that although Zappos would be a part of the larger company, it would preserve its quirky culture that focuses on keeping workers happy. He said that rather than describing the transaction as an acquisition, he'd prefer a looser formulation: "Zappos and Amazon sitting in a tree."
Hsieh has long shown an uncanny ability to navigate the new media landscape, and this announcement was no exception. The deal was kept secret from rank-and-file employees and from the press for months. Hsieh released the news to the world through his Twitter feed, beginning with "Big day!" He then directed employees and outsiders to view a YouTube video staring Amazon founder Jeff Bezos. "Zappos has a totally unique culture," Bezos said in the video. "I have seen a lot of companies and I've never seen a company with a culture like Zappos's."
In his letter, Hsieh said that he would do his best to keep Zappos independent of Amazon. The company will maintain its Las Vegas headquarters and its management will remain in place. "[W]e are planning on continuing to run Zappos as a separate company with our own culture and core values," he wrote. "And we're not going to be giving the Zappos discount to Amazon employees either, unless they bake us cookies and deliver them in person."