Today, Amazon and Zappos have announced that Zappos will be becoming a wholly owned subsidiary of Amazon, to the tune of $880 million in the form of Amazon stock.

Zappos CEO Tony Hsieh has the acquisition announced on the company blog:

Over the next few days, you will probably read headlines that say "Amazon acquires Zappos" or "Zappos sells to Amazon". While those headlines are technically correct, they don’t really properly convey the spirit of the transaction. (I personally would prefer the headline “Zappos and Amazon sitting in a tree…”)

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. From a practical point of view, it will be as if we are switching out our current shareholders and board of directors for a new one, even though the technical legal structure may be different.

Amazon founder Jeff Bezos has created a video to the employees of Zappos:

“Zappos is a company I’ve long admired,” said Bezos in a welcome video to the new acquisition. “Zappos has a customer obsession; that is where Zappos begins and ends, and it’s something I can identify with.”

What Does It Mean for the Future Both Companies?
Both companies will probably continue to function more or less how they always have, but I imagine you’ll see Amazon leverage the Zappos ability to deliver above-board (or “high-touch”) customer service in as many places as is applicable within the Amazon empire of products and services.

I imagine, particularly with Zappos finger on the pulse of the real-time web and various social networks, you’ll see a great deal less #AmazonFail, which was for all their savvy and know-how, a great vulnerability in the retail giant’s armor.