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April 21, 2014

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Amazon acquires Zappos for $847 million

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Zappos.com CEO Tony Hsieh poses with some of his company’s merchandise.

Zappos

Designer shoes serve as decorations atop cubicle walls at the corporate offices of Zappos.com in Henderson. Launch slideshow »

Zappos.com, an online retailer based in Henderson with annual sales exceeding $1 billion, announced today that it is being acquired by Amazon.com.

Amazon will pay about $847 million in stock and cash to acquire the 10-year-old company, which employs about 1,200 people at its headquarters in Henderson and a shipping facility in Kentucky.

“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,” Zappos CEO Tony 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 a letter sent to company employees today, Hsieh wrote that the change in ownership would have little or no impact on the day-to-day operations at Zappos and its personnel.

“Over the next few days, you will probably read headlines that say ‘Amazon acquires Zappos’ or ‘Zappos sells to Amazon,’” Hsieh wrote. “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.’). 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.”

Since its founding in 1999, Zappos has emerged as one of the more successful ventures of the dot-com era. In addition to topping the $1 billion mark in annual sales in 2008, Zappos has become known for its work atmosphere, which encourages employees to be creative through means such decorating their offices and joining in company parades. Employees also receive a free meal every day at work. Zappos has been recognized by Fortune Magazine on its Best Companies to Work For list.

The company’s culture has also become somewhat of a case study in the corporate world. Zappos regularly hosts representatives of other companies for tours of its headquarters, and earlier this month held a two-day boot camp for business professionals from other companies to show how Zappos does business.

In a statement, Amazon.com founder and CEO Jeff Bezos hinted that tapping into the Zappos culture was one of the motivations for the purchase.

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

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