A match made for heaven or for hell? Amazon(AMZN) buys Zappos

By: ispeculatornew
Date posted: 07.24.2009 (5:00 am) | Write a Comment  (3 Comments)

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zapposI must say I’m shocked. I glanced at my screen and looked with interest at a news release about Amazon.com (AMZN) buying Zappos.com for about 928$ millions USD. To most non-Americans, Zappos is completely unknown. But in fact, the website was a small but fast growing competitor to Amazon. How is a shoe and clothes retailer competition to the specialised book retailer? Simply because Amazon has already said it believed that it could sell anything to anyone at some point in the future. The strength of Amazon lies in its powerful distribution network. Zappos on the other hand is much smaller but has experienced impressive growth thanks to what is probably the best customer service, online or even offline.

Is it logical for these two companies to unite? In some way yes as there is no doubt that Zappos will be a lot more efficient if they are able to profit from the leverage they will now have. They are supposed to remain two independent companies but you would amazon_cravethink for example that this merger would help Zappos gain a more important presence internationally very fast. They are now joining with one of two big ecommerce companies in the world (with Netflix) and that is certainly a positive.

The one issue I have is that while Zappos was a private company, it was able to do a lot that was geared towards the long term, mostly actions geared towards their customer service. Even though they say nothing will change, Amazon is a public company that does have very high expectations and after missing its earnings this week, analysts will be looking into the impact of Zappos in the next few quarters of earnings. It will be interesting to see if this will create a clash of cultures. The management of Zappos has confirmed it was staying on board which is certainly a positive and will help to keep the strong company structure as well as keep employee retention.

As you can see in the video below this post, I do agree with the idea that Zappos will be able to learn a lot from Amazon’s experience in ecommerce and shipping worldwide. Even having the Amazon founder come out with a Youtube video, done while wearing jeans, will probably go a long way in showing Zappos employees how the values of the two companies are perhaps not as different as many could think. This will also certainly reassure the loyal and passionate Zappos customers about where their loved company is now headed.

You can also see a video from Amazon’s founder about the story of Amazon as well as the acquisition:

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