zappos-logoAs far as breaking retail news goes, this one came out of nowhere:  in a deal that has now become public, Amazon has purchased popular online shoe and apparel company for around $900 million USD.  (Most of Zappos’ compensation is in Amazon stock, which makes the exact value of the the transaction hard to pin down.)

That’s a lot of sneakers.

amazon-logoRumors about the deal abound, but many spectators suspect Amazon of swallowing up their greatest competition.  Zappos has dazzled customers with its huge selection of brands, competitive pricing, friendly customer service, and what has become its signature–free, fast shipping.  The only other online retailer that comes close to hitting this mark is–you guessed it–Amazon.  Add to this Zappos’ legendary employee loyalty and zany corporate culture, and it seems like a valuable property indeed.

According to a Wall Street Journal source,

…the two companies had been in tallks for months…Amazon’s logic in the deal, this person added, was to take out its largest competitor in the apparel space. One fear was that Zappos would branch out into new categories, eventually posing a bigger threat to Amazon, which itself began solely as an online bookseller.

So let the questions begin:  this ZDNet article does a good job of parsing the issues, which include the fate of Amazon’s own shoe branch, and the independence (or lack thereof) of Zappos’ current management, culture, and website.

Who will Amazon buy next?  Looks like they might be going on a shopping spree.