Washington — The vast empire of Amazon.com continues to expand, and has just added another interesting acquisition to its arsenal after last year’s Zappos. Woot, the whimsical online store which sells only one product a day, has been acquired by Web retail giant Amazon, the company announced Wednesday.
Days after axing down the price of its Kindle eReader by $40, the company on Wednesday disclosed that it has agreed to acquire Texas-based discount retailer Woot.com.
Exact financial aspects of the transaction were not disclosed but according to the popular US technology blog TechCrunch.com reported the purchase price at 110 million dollars.
According to a statement, Amazon will “promote the long-term growth of Woot, allowing it to continue its passion for serving customers with low prices across a broad selection of products.”
Woot communicated in a blog post that will become an independent subsidiary of the Seattle, Washington-based Amazon and will operate autonomously like another Amazon-owned company, online shoe store Zappos.
Woot, which claims approximately 2.75 million users, made its name by popularizing the online “deal of the day” concept, normally selling just one item each day for an astonishingly marked-down price. Items range from flat-screen TVs and Playstation 3’s to Microsoft Zune players. The site had flourished thanks to its great community engagement and the light tone it conducts its business with. It pioneered the one-deal-per-day model which has since been adopted, successfully, by other sites. The concept has become so favorite that it is not uncommon for items to sell out within in minutes. Spin-off sites have also become successful, highlighting wines, t-shirts, and products for kids.
Wednesday’s item, for example, was eight-gigabyte iPod Nanos for 99.99 dollars.
The company will continue to operate independently from its Carrollton, Texas, headquarters, similar to how Amazon has handled the Zappos and Audible acquisitions, Woot CEO Matt Rutledge said in a letter to employees published on the site.
“We plan to continue to operate Woot the way we have always run Woot — with a wall of ideas and a dartboard,” Rutledge wrote. “From a practical point of view, it will be as if we are simply adding one person to the organizational hierarchy, except that one person will just happen to be a billion-dollar company that could buy and sell each and every one of you like you were office furniture.”
During an exclusive interview with Fortune published earlier this week, Amazon CEO Jeff Bezos emphasized his support for the Kindle and its transformative effect on reading. “I think the definition of a book is changing,” he said. “When you are reading a physical paper book, you are not thinking about the ink and the glue and the stitching. … The Kindle’s designed to be the same so when you are reading, the whole device vanishes, so that you are left with the author’s world.”
On its part, Woot is handling the acquisition in typical fashion. Rutledge said in a humorous memo to employees that “Woot and all our various sites will continue to be an independently operated company full of horrible, useless products.”
“Amazon clearly knows what they are doing in a lot of areas, so we are geeked about the opportunities to tap into that knowledge and those resources, especially on the technology front,” he said.
“This is about making the Woot brand, culture, and business even stronger than it is today, and we expect that any changes will be for the better or we would not bother with this endless paperwork,” he added.
Last July, Amazon announced it would buy online shoe and apparel retailer Zappos.com for US$847 million in cash and stock. Amazon also acquired audio book seller Audible in a $300 million deal, announced in January 2008. Furthermore for Amazon, this acquisition marks another significant addition to its vast empire, besides making its entree into eReaders, cloud computing, and crowd sourcing services as well.
Rutledge in a statement said the deal will close in a few weeks. He declined to release revenue figures for the company but did not dispute a Wikipedia entry which listed 2008 revenue as 164 million dollars.
“We have grown since then,” he added.
Amazon invested some four million dollars in Woot in 2006.
Watch the amusing video to catch a glimpse of Woot!…