Welcome Guest | Login | Register
About Damien's Blog

Wonder what's new at FindAnyFloor.com or in the technology world in general? Visit Damien's Blog to find out. You'll get some of the latest technology news, emerging trends, and stories from our CEO's travels, businesses and life experience among several industries.

December 2016
  • S
  • M
  • T
  • W
  • R
  • F
  • S
  •  
  •  
  •  
  •  
  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
= New Post

Damien's Blog

The Zappos - Amazon Marriage, a Surprise in Timing

By Damien Patton, (1057 words) Posted in Corporate on July 26, 2009
There are (34) comments permalink

Is this an arranged marriage, a marriage of convenience or just a surprise announcement?

For many, hearing the news that Amazon.com had purchased Zappos.com was not a surprise move, but the timing seems to be off. For years Tony Hsieh had been leading Zappos to a head on collision with Jeff Bezos and Amazon as a competitor. There had been a lot of online chatter about Zappos becoming the new "Amazon" type online company and in the end, it was easier for Amazon to acquire Zappos then to try and compete with them in a long battle that would take their attention away from other innovations and possible competition.

On the day the news broke regarding the sale of Zappos, I called our office in Las Vegas to speak to Ryan, our VP of Internet Marketing. I knew he would have his ear to the ground and based on the people he knew affiliated with Zappos. When I asked why he hadn't called me to tell me that the largest online company based in our home town of Las Vegas (Henderson) had just sold, he was in shock and thought I was kidding. His first question to me was "why would Zappos sell now, and in this economy?"

Along with many in the tech and financial world that followed Zappos, we all knew that Amazon was watching them with a careful eye. Zappos was the leader in online shoe sales, and has unquestionably the greatest customer service of any online company, and possibly offline as well. As Zappos ventured into other non–shoe related markets, the writing was on the wall, they were going to be a significant threat to Amazon. Sure, Zappos may not have the product innovation like Amazon, but they have the most loyal customers, and in the online world, nothing else really matters.

As Ryan and I talked more about the marriage between Amazon and Zappos, he brought up the point that it must be an arranged marriage, meaning Tony Hsieh, must have been forced into this union. Tony is a different kind of leader, a true online maverick, and it is hard to imagine he would want to pass on his company and vision just at the time when Zappos was poised to explode into other online markets. Also, everyone knows that unless you are financially in trouble, today’s economic climate is not ideal for a sale. Part way through the call, Ryan blurted out, "it must be the investors (such as Sequoia) forcing Tony's hand." That sounded right but how were we going to find out. The next day the story would unfold and it became clear, Ryan was right.

Although Tony Hsieh and Zappos have come out and denied stories that the investors forced them to sell, we need to probably examine the words "force" and maybe in this case it isn't so literary. The stories are out now that show that Tony fought the sale, but the pressure was on from the investors who had put $60 million into Zappos. Tony knew that selling now meant a lower market price, and less cash versus stocks. Two years from now in a recovering economy it is likely that Zappos would fetch well over a billion dollars and the sale would include more cash than the $40 million plus stock offered by Amazon. A recent quote from Zappos stated that the entire board at Zappos agreed that joining forces with Amazon would be good for Zappos. I don't disagree with this statement but, it is in the way this is worded. I am sure that all agree a sale to Amazon was in the best interest of Zappos, but this becomes a question of timing. Now that the deal has been approved on both sides, it is in everyone's best interest to come out with messages that agrees with one another. For the investors such as Sequoia, the deal is great for them and the return on investment is incredible. From their point of view one cannot blame them in this economy for wanting to get a positive return on their investment. Sure, they could get a lot more in a couple of years, but no one has a crystal ball and selling today means a guaranteed positive return; tomorrow is anyone’s guess.

As sometimes is common in these types of sales, the news comes out that Jeff Bezos and Amazon will leave Zappos staff in place to continue running the company "as is." Is this possible? Only time will tell, but if past online mergers are any indication, it may prove to be difficult. Jeff is a visionary and recognizes the value of the culture and customer service juggernaut that Tony has created. Even if the best intentions by Amazon are to leave Zappos running under its current management, and to allow the Zappos culture to continue, human nature and common sense tells us it is impossible. Eventually the culture at Amazon will influence changes at Zappos that will start the ball rolling downhill. Will Tony and his executive team have the same passion for the company that they do now? One columnist that I read says "yes." He goes on to write how the Zappos leaders and their employees are incentivized to make this a success because of the amount of Amazon stock that is being traded in lieu of cash for Zappos. I hope this is the case but history tells me it may not be. Amazon is an online monster and while the purchase of Zappos will currently affect the Amazon share prices, in the long run the impact will be far less. Amazon's stock price is more dependent on the continued success of the Kindle and the presumed upcoming fight they are going to have with Apple over Kindle type innovation.

For Jeff Bezos and Amazon, they got what they wanted and paid less for it then they would have a year ago or a couple years from now. The Zappos purchase allows Amazon to be the leader in online shoe sales overnight as their current model was never going to be a threat or true competitor to Zappos. The sale also takes away the future threat of Zappos competing in other online market areas that Amazon is currently in. At the $847 million dollar price, mostly Amazon stock, it is my opinion that Jeff and his company clearly are getting the better deal. Tony's future at Zappos remains to be seen, but one thing I can guarantee, he will end up better in the long run and probably as the inspiration and leader of a yet unknown entity.

Icon: author blog About the Author:
Damien is the Founder and CEO of FindAnyFloor.com as well as several other technolgy businesses specializing in social media and search.
image: blog cloud comment

Comments (34)

Rob posted on: July 29, 2009

Damien,
Excellent blog post, I appreciate the insight and I am impressed you are willing to send the time and publicly offer opinions on this subject that could be deemed controversial. As an owner of a business I am fascinated by the dynamics of Boards and the behind the scenes negotiations on how these deals come about. Great insight, appreciate you taking the time to share your opinions in a timely manner.

Jim posted on: July 30, 2009

Damien,

Great article. Love the insight you bring to the topic.

What do you all think the big A bought the big Z for? Was it just the sales? Or do you think some of it was aimed toward the "alue of the culture and customer service juggernaut that Tony has created"?

Look forward to more blogs from you!

akopl posted on: October 15, 2012

thanks for this information really nice post keep it up,,,! play games online

veer34 posted on: October 28, 2012

o acordo é abundante para eles e para o reconhecimento do investimento é incrível. Do seu ponto de aparência não se pode acusação los neste resumo de ausentes para obter um reconhecimento absoluto do seu investimento. jogos do ben10 Claro, eles poderiam obter um lote acrescentou em um par de anos, mas ninguém tem uma rixa clara e assuntos agência afirmou hoje um retorno absoluto; amanhã é uma incógnita. jogos do mario

juliajin posted on: October 28, 2012

Ele passa a tratar de como os líderes Zappos e seus assessores são incentivados a realizar este um sucesso por causa da maior parte da Amazônia banal que está sendo negociado em vez de notas para Zappos. Eu realização este é o caso, mas a história diz-me que não pode ser. Frases De Amor | jogos do bobesponja

emmahoney posted on: January 25, 2013

This is http://leather4sure.com a great blog. I am pretty much pleased with motorcycle gear///motorcycle jackets///leather skirt///motorcycle clothing your good work. Keep it up.

jojo dy posted on: May 3, 2013

Great post I really like this one, I learn so many things from this post. - James Stuckey

Johnny posted on: August 13, 2013

Campaign has existed since consisting of swiss rolex replica fans wanting Glazer to sell his controlling interest in Manchester United. The weekend of 23rd January was witness to a non-violent protest, organised by the clubs supporters groups, replica handbags encouraging match going fans to wear green gold. months after the LUHG protest, reports of a replica swiss watches group named the emerged. A gathering was held with rich fans of the club to speak about a billion takeover.

coachkors posted on: October 28, 2013

Lovelorn boy just graduated soon, Coach Factory Online, because the girls went to another city to work, even though its just how diverse communication tool, http://www.laurenpoloralph.com/, but one city and another city, Coach Purses Outlet, destined to exist a certain distance, MCM Bags Outlet Online, heart to heart communication suddenly become so difficult, boys want is the most pure feelings, http://www.guccishoesofactory.com/, not too little, Coach Purses Outlet Online, the other one is a girl, http://www.mmonsterheadphones.net/, has be

Coach Outlet Online posted on: November 12, 2013

This is not surprising given its esteemed

Coach Outlet Online

world see our very best side, knowning that can encompass spending a

Coach Outlet

lot of money. Anytime asked should you experience this becoming a too-high reafoot,

Coach Factory Outlet

they response, "There are sometimes a hindfoot that is

Coach Outlet Online

definitely beyond their budget walking during, absolutely. are the ,

Coach Factory Outlet

A lot of people pursue your designs.

anneelaine22 posted on: February 26, 2014

Spacemaster Z-33 is mounted Replica Watches on a bearing red black rubber strap the inscriptions Omega and Speedmaster. It is also Rolex Replica available on a leather strap Brown Soft Touch. Black rubber bracelet Hublot Replica Watches has a foldover clasp in special titanium grade 5 for all visible parts and grade 2 for the moving parts.

Payday Loans Oceanside posted on: June 6, 2015

This short article is certainly such type of fine and fascinating 1; we’re seriously excited about this given fabric. I am hoping extra great article content might be processed inside your web-site. Now on top of that please click here & pay a visit to Payday Loans Oceanside With thanks considerably because of this and manage discussing.

actualit posted on: September 23, 2015


Jika kalian ingin dapat menyulam alis secara kompeten maka saya sarankan belajar di Kursus Sulam Alis di Surabaya.
Juga apabila kamu berminat sewa mobil yg sesuai bisa saya anjurkan diRental Mobil
Nah,tuk kalian yg lagi hadapi problem dengan pemanas air dikawasan kalian lalu servicelah di Service Wika SWH.
Kamu berminat memasok perabotan kedalam seluruh dunia? Silahkan baca ini Jasa Ekspedisi.

ravi kishore posted on: March 9, 2016

check your bihar 10th results results here

pillole sessuali per uomini senz posted on: May 5, 2016

Good publish! I think there square measure more pleasurable possibilities prior to for all those which can examine your website. You’ll currently follow-up pillole sessuali per uomini senza ricetta All the simplest with relation to discussing.

peter posted on: September 4, 2016

Fantastic data on your site, thank you for setting aside an ideal opportunity to impart to us. Astounding understanding you have on this current, it's decent to discover a site that subtle elements such a great amount of data about distinctive specialists. nouvalift instant wrinkle reducer

peter posted on: September 10, 2016

It's proper time to make a few arrangements for the future and the time has come to be glad. I have perused this post and on the off chance that I might I be able to wish to propose you few intriguing things or guidance.as example

peter posted on: September 17, 2016

I might want to say this online journal truly persuaded me to do it! Much obliged, great post. home page

blog link posted on: October 1, 2016

old man showing me what u been up to. Giving him Steak, egg and chips for supper after running round at the party

blog link posted on: October 2, 2016

website which is about this game.You have written very nice tips which are good in reading.I appreciate your efforts in making this post

resource posted on: October 6, 2016


That is wonderful information Jo!!!! Based on the presunrise and sunrise enhancement of your signals, I think the time from through would be best for our chances on if there are no thunderstorms in your area.

resource posted on: October 9, 2016

i am happy to find your website which is about this game.You have written very nice tips which are good in reading..

blog link posted on: October 10, 2016

You have written very nice tips which are good in reading.I appreciate your efforts in making this post.

fenugreek supplement posted on: October 13, 2016

This is really a nice and informative, containing all information and also has a great impact on the new technology.

peetr posted on: October 16, 2016

I was surfing net and luckily ran over this site and discovered exceptionally intriguing stuff here. Its truly enjoyable to peruse. I delighted in a considerable measure. A debt of gratitude is in order for sharing this magnificent data. tattoo supply

blog link posted on: October 17, 2016

Nice DXpedition ! No other with Log updated several time daily. Donovan, we are happy that accepted idea for back information via Guestbook with the rest part of the world. Safe trip to home for everyone.

robinjack posted on: October 24, 2016

This is truly a decent and useful, containing all data furthermore greatly affects the new innovation. A debt of gratitude is in order for sharing it blog comments backlinks

resource posted on: November 3, 2016

Foot ball is my favourite game,i am happy to find your website which is about this game.You have written very nice tips which are good in reading.I appreciate your efforts in making this post.

peter posted on: November 19, 2016

Extraordinary article with astounding idea!Thank you for such a significant article. I truly acknowledge for this awesome data.. messebau düsseldorf

icon: cloud post

Talk back - leave a comment

Post a Comment

Post a Comment

  • email a friend
  • delicious
  • digg
  • facebook
>