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Amazon buys Zappos

Amazon Global e-commerce retailer, Amazon, has bought the biggest shoe retailer Zappos, in a bid to merge communal customer-based ethics and share innovative technologies.

Originally the biggest online book seller, the Seattle-based company Amazon was the place to go for your A-level copy of Keat's poems or Marx's Communist Manifesto. But soon Amazon grew and began providing competitive prices for DVDs, games consoles, toys, furniture, and now it seems to offer everything under the sun delivered directly to your door in under three days.

Named after the world's largest river, Amazon founder Jeff Bezos wanted the online bookstore to grow into a catalogue which contained all products under the alphabet A-Z.

Lone Ranger

Although Amazon has acquired or invested in a number of companies, they have never been on as large as scale as this. Unlike otherinternet giants Google and Microsoft, who have done a number of deals with the likes of YouTube and Hotmail, Amazon has remained fairly singular.

While other websites were sky-rocketing to stardom in the 90s, Amazon grew steadily. They bought a number of smaller companies such as the movie databaseImdb .com for $55 million, which they bought in 1998, and in 1999 they bought Alexa.com, except.com and exchange.com for a total of US$165 million.

In 2006 Toys R Us used to get to Amazon's website through the online toys store, but this deal was broken after a lawsuit. Amazon also powers the retail section of websites including Marks and Spencer and Benefit Cosmetics.

But today is rather revolutionary for Amazon. Beacon Hill head offices will be abreast with excitement after it was announced at 1am this morning Amazon had bought Zappos.com for nearly US$920 million - its biggest buy yet and clearest partnership with a what would be top competitor.

Zappos CEO, Tony Hsieh announced the deal on his blog and Twitter feed , while Bezos announced it in a YouTube video .

The customer

In the video, Bezos said "Zappos is a company I have long admired. Zappos has a customer obsession and that is a very key factor for me. Zappos also has a totally unique culture. This is a very significant asset and I'm super excited about that. There's a lot of growth ahead of us withZappos."

Amazon Technology Officer Werner Vogels spoke to CXO earlier this year about the future plans for the company and its business strategy. In this exclusive interview he said he wanted Amazon to be the world's "biggest catalogue" and echoedBezos relentless focus on the customer.>

"We want to be earth's most customercentric company," Vogels said. "That means that we continuously focus on the customer, and in one case the customer is the retail customer, and in the seller business it also means that you completely focus on the seller as a customer."

Vogels also spoke about the culture of the company - and it is obviously this culture the Amazon bosses saw in Zappos which meant they wanted to become a partnership. He said: "I think it's very important throughout the company to have a culture that where everybody understands what the core values of the company are. In the case of Amazon, that is to really be focused on the customer, and I think that's - if you hear people that have come to the company and worked there for three months, and they will often give you feedback saying, 'I did not realize how important focusing on the customer was and how good Amazon is at that.' So having a core value throughout the company where everybody signs up to is essential."

In the interview, Vogels said Amazon aims to be the earth's biggest catalogue for online shopping.

He said: "One way to achieve that was of course to fill the catalog with items of ourselves, but as a strategy, it seemed to be much better to invite others onto Amazon to help us fill that catalog and actually make sure that our customers have access to as many products that they want to buy as possible."

The merger with Zappos is a step for Amazon to get nearer to this long time goal of global "catalogisation". It has been reported Zappos will keep it's own website, which was modelled originally on Amazon. In 2007 Amazon also launched it's own shoe store, Endless, modelled on Zappos.

From Zappos to Amazappos

Zappos has always had an incredibly loyal customer database, and Amazon's desire to align itself with this type of company highlights its own devotion to the customer.

Hsieh posted the email he sent to Zappos onto his Twitter feed. The email began: "Today is a big day in Zappos history." It explains how Zappos shareholders will now become Amazon shareholders. "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," said Hsieh. "Our vision remains the same: delivering happiness to customers, employees, and vendors. We just want to get there faster."

But Hsieh did say they would be tapping into Amazon's technology base. He said: "They have a lot of experience and expertise in a lot of areas, so we're very excited about the opportunities to tap into their knowledge, expertise, and resources, especially on the technology side."

We've been on friendly terms with Amazon for many years, as they have always been interested in Zappos and have always had a great respect for our brand."

Reports confirm the deal will be set sometime in the Autumn.

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