|Wed July 22 2009 22:30:36|
eBay Loses Zappos with Amazon Acquisition
By: Ina Steiner
While eBay's marketplace GMV continues to decline and the company is looking a bit tarnished, Amazon just scored a major coup by acquiring one of the coolest and beloved young brands around today - Zappos. The pending acquisition may also explain why Zappos abandoned the eBay marketplace after barely launching this spring.
According to a speech given by eBay Senior Vice President Stephanie Tilenius last month, Zappos had launched a Store on eBay to sell liquidation inventory using eBay's new Large Merchant Services API.
Tilenius heralded the Zappos brand on eBay during a speech at the Internet Retailer conference, but after the speech, Zappos denied they would be selling on eBay. Steve Hill, Vice President of Merchandising at Zappos, told AuctionBytes, "We did a small test on eBay but are not currently planning on moving forward with it." One can only surmise that Zappos backed away from eBay because of negotiations with Amazon.com.
Amazon has been a spoiler for eBay for a long time, having cherry-picked PowerSellers - independent Amazon sellers now account for 32% of all unit sales on Amazon, up from 25% five years ago, according to Peter Faricy, Amazon's VP of Seller Services. Of course, eBay was a major spoiler when it acquired Bill Me Later last year, an online payments company in which Amazon.com had invested but that is no longer welcome on the Amazon.com marketplace.
I heard Zappos CEO Tony Hsieh give a speech a few years ago. The culture at Zappos is young and hip, and they believe in doing anything and everything for the customer. Going to Las Vegas? Stop in to their nearby headquarters for a tour, he invited listeners.
One gets the feeling Bezos knows better than to mess too much with the Zappos culture, unlike eBay, who placed its own executives at the helm of new acquisitions and entrenched them in the eBay culture (ask the old PayPal gang how they felt post-acquisition).
Hsieh and Bezos couldn't be more different in style, but according to Bezos, it's Zappos customer obsession that gets him weak at the knees.
Look for acquisition details in tomorrow's AuctionBytes Newsflash.