Amazon.com buys Las Vegas-based online shoe store Zappos.com

One of the world's biggest e-commerce companies will buy Southern Nevada's best-known Internet retailer, but executives say the deal won't change the corporate culture behind one of the city's best places to work.

Amazon.com officials said Wednesday they have agreed to buy Las Vegas-based Zappos.com, a privately held online shoe store, in a deal worth about $850 million.

Through the purchase, Amazon.com will inherit the nation's 23rd best place to work, according to a recent report from Fortune magazine.

Fortune included Zappos.com in the 2009 edition of its 100 Best Companies to Work For, citing Zappos.com's free employee lunches, concierge services and 100 percent health-insurance coverage.

In a letter to employees dated Wednesday morning, Zappos.com's top official assured employees the corporate worldview that helped inspire such perks will stick around.

"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," wrote Tony Hsieh, chief executive officer of Zappos.com.

"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)."

On top of earning a nod from Fortune, Zappos.com appeared on the Inc. 500, Inc. magazine's roster of the nation's fastest-growing private companies.

Zappos.com made the 2007 list for increasing its annual revenue from $52.6 million in 2003 to $380.8 million in 2006, a 623.7 percent jump.

Fortune pegged the company's 2007 revenue at $839 million.

Wednesday's deal calls for Amazon to pay for the shoe, apparel and accessories company with about 10 million shares of stock.

Amazon values that at roughly $807 million, based on its average closing price in the 45 days that ended July 17.

Amazon said it will also pay $40 million in cash and stock to Zappos employees. The deal is expected to close this fall.

Zappos, founded in 1999, relocated from San Francisco to Las Vegas in 2004. It made a name for itself by offering free shipping in four or five business days on all its orders.

Zappos foots the bill for return shipping, too, and gives customers a year to send back purchases for a refund.

Amazon opened its own shoe and handbag shop under the name Endless.com in 2007. It offers free overnight shipping and free return shipping.

Spokesman Craig Berman said Amazon will keep both Endless and Zappos, and run them as separate entities.

He would not comment on whether the recession had hurt sales at Endless, or whether Amazon was able to grab Zappos at a bargain price because of the weakened economy.

Berman also would not say to what extent the companies' ordering and delivery logistics might be combined.

Zappos will continue to operate under current management from its headquarters in Las Vegas, and its Kentucky warehouse will operate as before.

Zappos officials said there are no planned layoffs.

"Your job is just as secure as it was a month ago," Hsieh wrote in his letter.

The company did let go of 8 percent of its 700 staffers in November. Even that move won plaudits from Fortune, which wrote that Hsieh "received several glowing letters from departing employees" after the cuts.

The company also closed two of its three local outlet stores, keeping its location on Dean Martin Drive but shuttering stores on Maryland Parkway and near the Galleria mall in Henderson.

Amazon.com maintains a 588,560-square-foot distribution warehouse in Fernley, near Reno.

Hsieh also told his workers he would have liked to share the news with them sooner, but securities laws prevented disclosures until Wednesday.

Zappos.com officials declined an interview with the Review-Journal, citing a "quiet period" the Securities and Exchange Commission mandates.

About the Amazon deal, Hsieh wrote: "We realized that Amazon's resources, technology, and operational experience had the potential to greatly accelerate our growth.

Hsieh posted a series of questions and answers on the Zappos blog. One was, will Zappos employees get an Amazon discount?

"No, because we are planning on continuing to run Zappos as a separate company with our own culture and core values. And we're not going to be giving the Zappos discount to Amazon employees either, unless they bake us cookies and deliver them in person."

Shares of Amazon fell 22 cents, to close at $88.79 before the acquisition was announced. In extended trading, the stock moved about 1 percent higher, to $89.70.

The Associated Press contributed to this report.