After Mastering Twitter, Zappos Acquired by Amazon

Tony Hsieh, CEO of Online retailer Zappos, has announced that the company has been acquired by Amazon and will become a wholly-owned subsidiary of Amazon. Tony has posted a CEO letter that he sent to all of Zappos employees today. Marketwatch notes that the deal is worth $807 million and Hsieh mentions in the letter that it’s not a cash deal rather a stock deal.  Total deal value about $850 million including $40 in cash and restricted stock. 

Amazon expects the acquisition to close this fall. Hsieh notes that there are no plans to cut headcount and he and the other executives plan to stay on at Zappos.

From Marketwatch, Amazon said in a statement that under terms of the deal, it will buy all outstanding shares, warrants and options of Zappos in exchange for roughly 10 million Amazon shares with their value based on average closing prices in June and July. In addition, Amazon “will provide Zappos employees with $40 million in cash and restricted stock units,” Amazon said.

Update: Based on today’s Amazon share price, the deal is worth more than the $807 million reported in the Amazon release. It looks like the final price will be determined when the deal closes.

One can only wonder if Zappos awesome usage of Twitter played a part in the acquisition. Will Netflix be next?