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Amazon To Buy Woot

7/01/2010 10:00:05 AM Eastern

Carrollton, Texas - Woot.com, the
quirky direct-sale distributor known for its daily single-item blow-out sales,
is being acquired by Amazon.com.

The deal is expected to close in the
third quarter.

Terms weren't disclosed, although
reports put the price tag at $110 million in cash.

Woot will continue to operate as an
independent subsidiary, Amazon said, much as its recent Zappos and Audible.com
acquisitions.

Woot's sharp pricing, limited
deal-of-the-day offers and irreverent tone have helped it amass nearly 3
million registered customers since it was founded in 2004. The site's cheeky
personality was reflected in an open letter to employees posted yesterday by
CEO Matt Rutledge. "We're still going to be the same old bottom-feeders our
customers and readers have come to know and love," he wrote. "For Woot, our
vision remains the same: somehow earning a living on snarky commentary and
junk."

Woot's first deal-of-the-day in the
wake of the announcement is an Amazon Kindle, on sale today for $150 plus $5
shipping.

According to the local Dallas
Morning News, Woot stemmed from a 1994 startup that sold outdated computer
components. Woot was later formed to sell off excess inventory, and the two
operations merged in 2005. Amazon acquired a minority stake in the business in
2006.

The newspaper pegged Woot's annual
sales at $164 million in 2008, the last year it reported revenue. The CE site
has since launched several specialty offshoots including Kids.woot, Wine.woot
and Shirt.woot.

In a statement, Amazon said the acquisition
will "foster the long-term growth of Woot, allowing it to continue its passion
for serving customers with low prices across a broad selection of products."

Added Rutledge in his letter: "Our
business model is so vague that there's no way Amazon can possibly change what
it is we're truly doing: preparing the way for the rise of the Lava Men in
2012."

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