Mergers & Acquisitions 2.0

Big news on Wednesday and Thursday was that Amazon acquired specialist online retailer Zappos for about $850 million in an all-stock transaction.
In characteristically open style, Zappos CEO Tony Hsieh has posted a letter to all employees today on his blog.

Here are a couple of snippets from the letter:

A big part of the reason why Amazon is interested in us is because they recognize the value of our culture, our people, and our brand. Their desire is for us to continue to grow and develop our culture (and perhaps even a little bit of our culture may rub off on them).
……
Several months ago, they reached out to us and said they wanted to join forces with us so that we could accelerate the growth of our business, our brand, and our culture. When they said they wanted us to continue to build the Zappos brand (as opposed to folding us into Amazon), we decided it was worth exploring what a partnership would look like.
….
We learned that they truly wanted us to continue to build the Zappos brand and continue to build the Zappos culture in our own unique way. I think “unique” was their way of saying “fun and a little weird.”
Amazon realized that it really was the case that our culture is the platform that enables us to deliver the Zappos experience to our customers. Jeff Bezos (CEO of Amazon) made it clear that he had a great deal of respect for our culture and that Amazon would look to protect it.

The amazingly great thing about this deal is to see how a technical giant like Amazon can recognise the incredible brand value and customer loyalty built up by Zappos and choose to support them in their unique approach to business.

Too often companies are valued based on their balance sheet, assets, turnover, and a crude “goodwill” value placed on brands and other intangible value. Rarely is a corporate culture given such high value and explicitly recognised as a valuable asset to be nurtured and retained after acquisition.
Too often the priority after acquisition is integration and “rationalisation”.

I hope we see more of these kinds of deals, where customer-obsessed companies are valued this highly.
Zappos believes that “Your relationships are your brand”

Take a look at this great post about Zappos on Mashable from a couple of months back going into some detail regarding their customer-focus and use of social media tools.

Updated: As usual Brendan McNulty was on this one, and blogged about Zappos back in May and again this week

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• Amazon Acquires Zappos; Zappos Pretends It’s Not Really An Acquisition (techdirt.com)
• Tony Hsieh, CEO of @Zappos: Live Interview on #MashChat at 4:00PM PT (mashable.com)
• Report Says Zappos Was Forced To Sell To Amazon [Zappos And Amazon] (consumerist.com)
• Getting the Goods: The New Amazon/Zappos Supply Chain Story (readwriteweb.com)