March 17, 2010, 12:00 AM

Independent-minded Zappos.com is fitting into the world of Amazon.com

It’s been five months since the deal closed and so far the marriage between Amazon.com and Zappos.com is working well, says Zappos CEO Tony Hsieh.

It’s been five months since the world’s biggest online retailer officially acquired the largest online shoe store and so far the marriage between Amazon.com Inc. and Zappos.com Inc. is working well, Zappos CEO Tony Hsieh says in a new blog posting.

With a bigger parent and deeper resources, Zappos, No. 27 in the Internet Retailer Top 500 Guide, was able to increase its gross merchandise sales by 18.8% to $1.20 billion in 2009 from $1.01 billion in 2008, says Hsieh. “Amazon has continued to allow us to run Zappos independently with our own unique culture, brand and way of doing business,” Hsieh says. “From our point of view, it`s been as if we swapped out our previous board of directors with a new one, but we now have access to a lot more resources so we can continue to build the Zappos business even faster. Over the past few months we`ve actually seen our growth rate accelerate compared to the prior year.”

With Amazon’s backing, Zappos will continue to expand further into apparel and other product categories, says Hsieh. “We`re making a big push into apparel, which is four times the size of the footwear market, as well as other product categories including bags, accessories, and housewares,” says Hsieh. “We think we’re just at the tip of the iceberg of what`s possible as we continue to build the Zappos brand.” Zappos.com began diversifying into other merchandising categories in 2008 when it acquired footwear and accessories site 6pm.com from eBags.com, No. 93 in the Internet Retailer Top 500 Guide, for an undisclosed price.

Amazon completed its acquisition of Zappos.com in a stock deal valued at almost $900 million in November. Amazon made the acquisition to gain market share in the online footwear market, which Forrester Research estimates could generate annual sales of up to $5.5 billion as soon as this year. In return, the Zappos.com board of directors agreed to an acquisition because Amazon promised to run Zappos.com as an independent entity.

Besides benefiting from its new parent’s deep pockets, Zappos could also take advantage of Amazon’s bigger fulfillment infrastructure, advanced technology and diverse customer base. “We`ve retained our independence and our culture is as strong as before the acquisition,” Hsieh says in his blog update. “We`ve been learning a lot from each other and the new partnership has enabled us to move even faster.”

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