6 ms·

Amazon Buys Zappos

139 points by transburgh 17y ago

jonknee 17y ago
Good for them, they are two of my favorite online retailers.
- weaksauce 17y ago
  Agreed, I hope that even though they will be run as two separate companies they will maintain the corporate culture of zappos even under pressure.
vaksel 17y ago
Sounds like a very good partnership for both parties
vaksel 17y ago
the negative quantity mistake is pretty funny
smhinsey 17y ago
Here's the CEO's letter to employees, which has a little more info: http://blogs.zappos.com/ceoletter http://blogs.zappos.com/ceoletter
- jakewolf 17y ago
  A lot more info! If only more people would upvote the original source.
  - deleted 17y ago
    [deleted]
- tlrobinson 17y ago
  The video from Jeff Bezos is also worth watching (though there's not many details of the deal): http://www.youtube.com/watch?v=-hxX_Q5CnaA http://www.youtube.com/watch?v=-hxX_Q5CnaA
- deleted 17y ago
  [deleted]
- alanthonyc 17y ago
  I'm with you. Thanks for providing the ceo letter link. There's an HN link right below this one on the front page, I'd upvote that one. As for the purchase, I hope they continue to have their customer tours in Vegas. I was planning to take it one of these days.
edawerd 17y ago
Congrats to Tony on his second acquisition. (He sold LinkExchange to Microsoft for $265M in 1998)
yan 17y ago
This deal feels right. Both companies seem to be committed to customer service as their number one goal. Based on what I've been reading about Zappos, Tony & Co deserver this. Great company, great management, great culture, great news!
- scotch_drinker 17y ago
  Except for that whole deleting e-books of customers' Kindles without telling them thing, I agree. EDIT: I'm curious about the downvotes. I think deleting books of customers' Kindles is in direct opposition to customer service being their number one goal. I have a feeling Amazon isn't all that interested in customer service and I don't remember any super positive things about Amazon culture. What am I missing?
  - boundlessdreamz 17y ago
    It was a horrible mistake. But they have said that they will never do it again. Looks like they have learned their lesson. You can give them a pass for now ?
  - Mazy 17y ago
    Yes, in the short term it sucks that they deleted e-books, but they are doing it to make sure that in the long term, they can continue to provide a wide variety of e-books to their customers. They have to keep the publishers happy to do this.
- enjo 17y ago
  Doesn't it feel like a pretty low-ball deal for Zappos? Only $40M in cash and only $850M overall. I get that they're a lower margin business, but still... I'm SHOCKED that they didn't get more out of it.
  - yan 17y ago
    Well, what would you assume is fair and why?
  - tybris 17y ago
deleted 17y ago
[deleted]
alaskamiller 17y ago
Amazon bought zappos because zappos is a top notch shipping, fulfillment, and logistics company. That happens to sell shoes but they can easily transition to something else like how they experimented with accessories and even computer goods. Amazon made a cheap deal to buy a younger smaller amazon to add to their existing expertise. Tony Hseih is amazing to me. LinkExhange sold to Microsoft when he was in his mid 20's and now this. Amazing.
- imajes 17y ago
  actually i would suspect that Amazon partnered with zappos because zappos has a great company culture and brand, and amazon are having problems retaining theirs as they get bigger. I am sure amazon doesn't need help doing supply chain - in fact I am certain there'd be significant savings to have amazon fulfill zappos' orders.
  - mbrubeck 17y ago
    Amazon could definitely use Zappos' brand recognition in the shoes/fashion market. Amazon tried entering that market under its "Endless.com" brand: http://www.endless.com/ http://www.endless.com/ (I don't know how successful it's been.) Amazon would love to grow into every vertical market, but in branding terms many people still think of them as selling books and media, and maybe electronics. Buying a recognized brand is a significant shortcut, especially if that company can benefit in turn from Amazon's technical infrastructure. Full disclosure: I worked for Amazon from 2005 - 2008.
  - Harj 17y ago
    i cant imagine Amazon would pay $840m just for zappos' culture and brand
    - jrockway 17y ago
      The actual letter from the CEO mentions that Amazon may be using Zappos' warehouse space, which is "closest" to the UPS Worldport. (Incidentally, Louisville may be UPS' hub, but my Amazon packages arrive fastest when they ship from the Indiana warehouse.)
swwu 17y ago
I find it vaguely surreal that I work at Amazon, yet I read about this on TechCrunch before I found out "officially".
- vaksel 17y ago
  Welcome to the world of publicly traded companies.
jcreamer120 17y ago
Congrats to Zappos. This deal seemed to fly under the radar. I think this is good buy for Amazon as long as they're leaving management in place.
mgenzel 17y ago
It seems a good fit, but I always do worry when great grassroots-type great-culture great-customer-service company gets acquired by a much larger company (even if it's Amazon, which is much better than others - I worked there, I know). It's very hard to avoid the intermixing, and the bad things flow much better than the good.
djb_hackernews 17y ago
I recommend zappos to everyone. I haven't bought footwear anywhere else for at least the past 5 years. It seems bizarre it took so long for an online retailer to figure out a great barrier for online shoppers is the return shipping if the item doesn't work out. They got my loyalty based on that even though their prices aren't the absolute cheapest on the net.
jakarta 17y ago
I wonder what the profit is like over at Zappos. We know that they did $1.1ish Billion in revenues but profit figures may be much lower (I've heard as low as $50M pre-tax). My guess though is that Amazon's shipping chain will allow Zappos to lower their costs, increasing EBIT. Still though, does not seem like a cheap deal. At least Amazon will be able to leverage the Zappos brand should they decide to expand more into Apparel. This would probably work out well in the long term.
b3b0p 17y ago
My first thought when I read this announcement was if my Amazon Prime would work with Zappos eventually. It sure would be nice, but I'm not counting on it.
mdg 17y ago
"They sell fuckin shoes! People were selling shoes before them" - dhh. That quote really struck a chord with me from his talk in 2008. It is quite possibly one of my favorite quotes ever.
scumola 17y ago
Too bad zapazon.com is already taken. :)

Amazon Buys Zappos

139 points by transburgh 17y ago

jonknee 17y ago

Good for them, they are two of my favorite online retailers.

weaksauce 17y ago
Agreed, I hope that even though they will be run as two separate companies they will maintain the corporate culture of zappos even under pressure.

vaksel 17y ago

Sounds like a very good partnership for both parties

vaksel 17y ago

the negative quantity mistake is pretty funny

smhinsey 17y ago

Here's the CEO's letter to employees, which has a little more info: http://blogs.zappos.com/ceoletter http://blogs.zappos.com/ceoletter

jakewolf 17y ago
A lot more info! If only more people would upvote the original source.
- deleted 17y ago
  [deleted]
tlrobinson 17y ago
The video from Jeff Bezos is also worth watching (though there's not many details of the deal): http://www.youtube.com/watch?v=-hxX_Q5CnaA http://www.youtube.com/watch?v=-hxX_Q5CnaA
deleted 17y ago
[deleted]
alanthonyc 17y ago
I'm with you. Thanks for providing the ceo letter link. There's an HN link right below this one on the front page, I'd upvote that one. As for the purchase, I hope they continue to have their customer tours in Vegas. I was planning to take it one of these days.

edawerd 17y ago

Congrats to Tony on his second acquisition. (He sold LinkExchange to Microsoft for $265M in 1998)

yan 17y ago

This deal feels right. Both companies seem to be committed to customer service as their number one goal. Based on what I've been reading about Zappos, Tony & Co deserver this. Great company, great management, great culture, great news!

scotch_drinker 17y ago
Except for that whole deleting e-books of customers' Kindles without telling them thing, I agree. EDIT: I'm curious about the downvotes. I think deleting books of customers' Kindles is in direct opposition to customer service being their number one goal. I have a feeling Amazon isn't all that interested in customer service and I don't remember any super positive things about Amazon culture. What am I missing?
- boundlessdreamz 17y ago
  It was a horrible mistake. But they have said that they will never do it again. Looks like they have learned their lesson. You can give them a pass for now ?
- Mazy 17y ago
  Yes, in the short term it sucks that they deleted e-books, but they are doing it to make sure that in the long term, they can continue to provide a wide variety of e-books to their customers. They have to keep the publishers happy to do this.
enjo 17y ago
Doesn't it feel like a pretty low-ball deal for Zappos? Only $40M in cash and only $850M overall. I get that they're a lower margin business, but still... I'm SHOCKED that they didn't get more out of it.
- yan 17y ago
  Well, what would you assume is fair and why?
- tybris 17y ago

deleted 17y ago

[deleted]

alaskamiller 17y ago

Amazon bought zappos because zappos is a top notch shipping, fulfillment, and logistics company. That happens to sell shoes but they can easily transition to something else like how they experimented with accessories and even computer goods. Amazon made a cheap deal to buy a younger smaller amazon to add to their existing expertise. Tony Hseih is amazing to me. LinkExhange sold to Microsoft when he was in his mid 20's and now this. Amazing.

imajes 17y ago
actually i would suspect that Amazon partnered with zappos because zappos has a great company culture and brand, and amazon are having problems retaining theirs as they get bigger. I am sure amazon doesn't need help doing supply chain - in fact I am certain there'd be significant savings to have amazon fulfill zappos' orders.
- mbrubeck 17y ago
  Amazon could definitely use Zappos' brand recognition in the shoes/fashion market. Amazon tried entering that market under its "Endless.com" brand: http://www.endless.com/ http://www.endless.com/ (I don't know how successful it's been.) Amazon would love to grow into every vertical market, but in branding terms many people still think of them as selling books and media, and maybe electronics. Buying a recognized brand is a significant shortcut, especially if that company can benefit in turn from Amazon's technical infrastructure. Full disclosure: I worked for Amazon from 2005 - 2008.
- Harj 17y ago
  i cant imagine Amazon would pay $840m just for zappos' culture and brand
  - jrockway 17y ago
    The actual letter from the CEO mentions that Amazon may be using Zappos' warehouse space, which is "closest" to the UPS Worldport. (Incidentally, Louisville may be UPS' hub, but my Amazon packages arrive fastest when they ship from the Indiana warehouse.)

swwu 17y ago

I find it vaguely surreal that I work at Amazon, yet I read about this on TechCrunch before I found out "officially".

vaksel 17y ago
Welcome to the world of publicly traded companies.

jcreamer120 17y ago

Congrats to Zappos. This deal seemed to fly under the radar. I think this is good buy for Amazon as long as they're leaving management in place.

mgenzel 17y ago

It seems a good fit, but I always do worry when great grassroots-type great-culture great-customer-service company gets acquired by a much larger company (even if it's Amazon, which is much better than others - I worked there, I know). It's very hard to avoid the intermixing, and the bad things flow much better than the good.

djb_hackernews 17y ago

I recommend zappos to everyone. I haven't bought footwear anywhere else for at least the past 5 years. It seems bizarre it took so long for an online retailer to figure out a great barrier for online shoppers is the return shipping if the item doesn't work out. They got my loyalty based on that even though their prices aren't the absolute cheapest on the net.

jakarta 17y ago

I wonder what the profit is like over at Zappos. We know that they did $1.1ish Billion in revenues but profit figures may be much lower (I've heard as low as $50M pre-tax). My guess though is that Amazon's shipping chain will allow Zappos to lower their costs, increasing EBIT. Still though, does not seem like a cheap deal. At least Amazon will be able to leverage the Zappos brand should they decide to expand more into Apparel. This would probably work out well in the long term.

b3b0p 17y ago

My first thought when I read this announcement was if my Amazon Prime would work with Zappos eventually. It sure would be nice, but I'm not counting on it.

mdg 17y ago

"They sell fuckin shoes! People were selling shoes before them" - dhh. That quote really struck a chord with me from his talk in 2008. It is quite possibly one of my favorite quotes ever.

scumola 17y ago

Too bad zapazon.com is already taken. :)