I guess they don't call them "vulture capitalists" for nothing. Oh well, cheer up Tony - at least you just made a boatload of money!

If I had invested 50 million in something, and had the option to make about 15x that much back, I don't care how awesome the company is, I'd probably do the same thing.

This is how VC's are able to fund all those shitty little startups - you lose a lot in bad companies, but every now and then you hit the jackpot. In this case, the jackpot is a huge payout from Amazon.

@giggitygoo: Yeah being partly owned by venture capitalists means you've already sold out your independence

I work in the business incubation area. One of the most important decision factors for most investors into a start-up (this does not include only venture capitalist, but also such "normal" people as employees with stock options) is the exit strategy of the company. Basically, there are only two successful exit strategies: being acquired or going public. The third strategy, which Zappos would've probably preferred, operating as an independent going concern, would've not attracted any external investors, as such investments are very illiquid and have a very long payout period (very few venture funds operate with a time horizon longer than 10 years, so most investments are cashed out in 3-7 years). Most likely, Zappos did promise a certain exit strategy when they negotiated with its investors, and they called the management out on it. No matter how much people like a company, this is simply business as usual, which has been in plans ever since Zappos got its first external investment.

How is this different from any other privately owned company getting sold to another company at the discretion of its owners?

@scoobydoo:

Exactly. I bet Mark Zuckerberg will kick himself for not selling Facebook for $1 billion a few years ago when he had the chance.

@Sarah House: CEOs don't always get what they personally want, I mean. I think selling to Amazon would be a *very* good business decision (and not just because my boyfriend works for Amazon ;).

so, take the money you made upstarting zappos & start a new, better company. it sucks, but this is the reality of capitalism - especially venture capitalism. they're not in it for the long haul. they're in it just long enough to make gobs of cash & move on. tony should have seen this coming.

@wgrune: How does anybody not sell *anything* for a billion dollars?

I hope this doesn't tarnish their customer service. Just this week I ordered a pair of shoes that turned out to be a half size too big. I went to return them and order the right size (there's no 'exchange' button) and found that the shoes were now more expensive. I emailed Zappos and explained. They responded saying that of course they would honor the original price, and that they had taken the liberty of sending me the new shoes, and that they'd upgraded me to free one-day shipping. Wow. You don't see customer service like that much these days!

@mac-phisto:

he should name it soppaz...

@Neophiliack:

Yeah, I don't care how much heart and soul and sleepless nights I poured into a company, if you waved a couple hundred million in front of me I would be looking at buying and island somewhere and disappearing.

@Sarah House: If by owners you mean Venture Capitalists, nothing different.

If you mean founders/ceos, then some are often willing to let the bigger business buy the off, and get a big payoff in return.

We had a talk at the university once from an alumni, who TWICE founded a startup on a new idea, built it up, and twice sold it off to the big players for an insane profit. Once to SUN and once to Yahoo

Can you really say they were "forced" when it was someone with a significant ownership stake in the company who "forced" it? That's like saying I forced myself to eat lunch at Wendy's today. I chose to eat lunch at Wendy's.

@Neophiliack: I wouldnt sell my pure titanium balls for a billion dollars.

Zappos is the only place I would order shoes from without being able to try them on due to their superior service and policies. That is what makes them so successful as an online retailer. If Amazon changes that, then Amazon paid way too much for soon to be defunct website.

@RobertBaron: Agreed, even my Dad (who refuses to shop online) heard about their customer service from his friends and decided to give them a try because he couldn't find his favorite all white leather Tretorn sneakers in the stores anymore. That was a huge deal, I was so proud of him! *wipes tear* And they didn't let him down. My Dad even I suggested I shop there.

@MostlyHarmless: Then sell your nuts.

@Parapraxis: Mmmmmm, soup.

Where is this superior customer service everyone is raving about? I emailed them once about a support issue and got a fairly generic form email back which barely answered my question.

@madog: have you gone nuts? they're literally my brain!

@Cant_stop_the_rock: Your genitals own a major stock of your brain, but you don't always listen to him (his best friend is an asshole, anyway). Sometimes you can't help it and he forces you both into tight and awkward positions.

@Cant_stop_the_rock: I seriously doubt your decision making abilities given you chose to eat at Wendy's today.

@morlo: No, it means they give you the freedom to pursue your ideas.

was forced to sell to Amazon by venture capitalists who had invested in the company.

So, it was what the company owners wanted.

@roccasaurus: or both?

I don't understand what's supposed to be surprising about this.

Well whoever started Zappos should just start up another company -- perhaps an electronics store -- so we can get good service in an area other than just shoes.

@Neophiliack: Exactly. Everyone and everything has a price. A billion can buy you just about anything.

@Thorny: This is a good idea...if they ship to countries not served by Newegg.

My biggest question is wtf Amazon finds in Zappos that's worth that much.... they already have near-identical Endless.com

That's odd.

@michaelgibbons:

Unsuccessful troll is unsuccessful. Yawn.

@inspector_fenwick: Pointing out the bias in a Consumer Reports website is now trolling, huh?

@michaelgibbons:

Sounds like a textbook troll attempt by injecting a political slant and insinuating that Consumer Reports is 'biased' either for or against Zappos/Amazon.

I'm presuming this is on this site because Zappos is the gold standard for customer experience, and it's being absorbed by a company which gets tons of positive & negative press because of its sheer size.

Or, in your opinion, it's because some crazy liberal blogger hates the idea of a business buying another business without any separate merits.

But oh snap, here I am, throwing another tire on the fire.

@Froggmann: But it's not fast food! It's Wendy's!

@Kevin Bourrillion: The title got you to come to the article. It's called sensationalism. And apparently it works.

2 business maxims:

1. There ain't no free lunch.

2. There is always a catch!

DOWn, baby, DOWn!

1 more maxim:

3. The deep pockets always win!

Lbrl bs. bsnss gt bggr. h ns!

@Neophiliack: I'm completely baffled by that. You'd have to be rolling like Bill Gates or whatever they're trying to buy would have to be something that's not about the money. Since Facebook isn't about improving humanity or anything like that I just don't get it.

Maybe it's a Chocolate Factory it-has-to-be-run-they-way-I'd-run-it thing.

@Sarah House: "If by owners you mean Venture Capitalists..."

By owners we mean owners. Venture Capitalists put money into this venture in exchange for an ownership stake. Apparently enough of an ownership stake that they could override the CEO / founders wishes.

@RedwoodFlyer: Buying Zappos means getting rid of a competitor.

@Paul Carr: At least for now - until the effects of all that inflationary printing comes home to roost. I'm investing in wheelbarrows if I ever get any cash.

another maxim:

4. Capitalism always aims toward monopoly.

@From the cubicle of PGibbons:
well said.