June 30, 2010, 4:43 PM

Amazon acquires Woot.com

Amazon.com is acquiring one of the pioneers in offering the one-day bargains.

Mark Brohan

Research Director

Lead Photo

Amazon.com is acquiring daily deal site Woot.com, one of the pioneers in offering the one-day bargains that many online consumers seem to love.

Amazon, No. 1 in the Internet Retailer Top 500 Guide, will purchase Woot (No. 176) for an undisclosed amount.

Amazon, which just about a year ago acquired Zappos.com in a deal valued at almost $900 million, isn’t saying much about its latest acquisition. But in a series of blog postings on Woot.com, founder and CEO Matt Rutledge says his company looks forward to becoming an independent operating subsidiary of Amazon. “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,” Rutledge wrote in a blog posting to employees.

Woot, which generated Internet Retailer-estimated web sales of $71.6 million in 2009 and offers one discounted item a day such as computer hardware or an electronics gadget, is making the deal to take advantage of Amazon’s deep pockets and technology base, Rutledge says. “Amazon clearly knows what they're doing in a lot of areas, so we’re geeked about the opportunities to tap into that knowledge and those resources, especially on the technology side,” says Rutledge. “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 wouldn't bother with this endless paperwork."

 Rather than take the time to build a private sale or daily deal web site, Amazon likes Woot.com because of its already established clientele, says Scot Wingo, CEO of online marketing service provider ChannelAdvisor Corp. “Woot is one of the oldest flash sale sites, and while it doesn’t have all of the buzz of some of the luxury and apparel companies like Gilt Groupe or Ruelala.com, Woot has a huge and loyal following,” says Wingo. “It will be interesting to see what Amazon does with this asset moving forward. It could be used to come out with different verticals such as apparel.”

 

Comments | 3 Responses

  • We love w00t. Truly a cool company (from attitude to how the operate). From what I understand they became very sharp at acquiring products - almost a buyer resource. That, for Amazon, could mean a number of additional options going forward. And their ability to sell to a mob in short order makes them a killer promotional tool. Best of success to Woot.com. They are truly innovators. Mark Alan Effinger http://www.ThoughtRod.com

  • "Woot, which generated Internet Retailer-estimated web sales of $71.6 million in 2009" That's pretty sloppy estimating. For a college ecommerce project my class reviewed Woot's sales data by looking in each Woot forum and multiplying their sales data times the sale price to come up with an actual for Woot's sales. Your "estimate" is off by around $100M once you take into account all of Woot's retail properties. Seems as though your estimate is more of an uneducated guess but I suppose that's what passes for journalism today. Shameful that you charge people for your Top 500 guide that is clearly based on mis-information.

  • Actually, we are pretty good at research, including our 2009 web sales estimate of $71.6 million for Woot.com. Our estimate is for their business-to-consumer web sales, which is about 43.7% of their total annual sales of $164 million (yes, they give us actual sales). As a scholar of the Woot.com business model, you know they have a substantial business-to-business base. To make a more “apples to apples” comparison with other b2c sites, we estimate and then rank on the true online retail portion of the business. By the way, Woot, like any other Top 500 retailer we survey, has multiple opportunities to comment on the estimates we share with them prior to publication. Mark Brohan

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