Amazon's Deal of the Day

You're never too big to go shopping. Leading online retailer Amazon.com (Nasdaq: AMZN  ) is acquiring Woot.com, the popular site that helped usher in the era of daily deals in limited quantities.

Terms of the deal aren't being publicly disclosed, but tech blog TechCrunch reports that it's an all-cash deal for $110 million. That's a pity, because Woot seemed headed for far greater things in its heyday.

The online liquidator has been selling marked-down wares -- one deal at a time -- for years. Our own Fool Seth Jayson was hoping the company would go public five years ago, but to no avail. Woot's clever descriptions, adrenaline-pumping deals, and active community helped carve out a budding e-tail empire that was part Overstock.com (Nasdaq: OSTK  ) and part J. Peterman catalog.

Imitators quickly followed. Amazon broke in its Gold Box promotions. Blue Nile (Nasdaq: NILE  ) breathed life into recessionary holiday sales with its Daily Gem program two years ago. Even American Express (NYSE: AXP  ) got into the act with the My Life My Card holiday deals.

However, the real raiders of Woot's model proved to be localized daily-deal upstarts. Groupon, LivingSocial, and other clones have grown popular during the economic downturn, providing city-specific deals on restaurants, spas, and leisure services. Market leader Groupon aims to mimic Woot's edgy tone in writing up its markdowns.

Fortunately for Woot and its playful corporate culture, Amazon has proven to be a "hands-off" acquirer. It has let Zappos and Audible operate as independent subsidiaries, and the same fate should await Woot. The newly acquired company will remain in Texas, half a country away from Amazon.com itself.

Without knowing Woot's most recent financial performance -- or confirmation of Amazon's price -- we don't know whether Amazon got a Woot-worthy deal here. However, Amazon's ability to once again latch on to a hip retailer that is passionate about what it does is clearly a good thing.

What should Amazon.com buy next? Share your thoughts in the comment box below.

American Express is a Motley Fool Inside Value pick. Blue Nile is a Motley Fool Rule Breakers selection. Amazon.com is a Motley Fool Stock Advisor recommendation. Try any of our Foolish newsletter services, free for 30 days.

Longtime Fool contributor Rick Munarriz has been shopping online since the early 1990s, even before Amazon.com was around. He does not own shares in any of the stocks in this article. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.


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  • Report this Comment On July 01, 2010, at 12:29 PM, CPACAPitalist wrote:

    First let me say that the J. Peterman catalog reference is solid gold hilarious. Second, i'll just tune in to say that I think Amazon is a great business model and acquisitions like Woot are only going to help.

  • Report this Comment On July 02, 2010, at 12:05 PM, gemmil wrote:

    i second the peterman reference. althought, i think it would take kramer's brain to come up with a deal of the day for the adventerer's company.

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