Amazon buys Zappos, killing a potential threat

Sometimes, the best way for an established company to hold its ground and avoid having its business disrupted by a rival is to acquire the disruptor.

Today, Amazon.com (AMZN) did just that. Amazon, an innovative company by many measures, said this afternoon that it would acquire Zappos.com, the online shoe retailer known for its outstanding customer service. Amazon offered $807 million in cash and stock; it will issue 10 million shares for Zappos and provide its employees with $40 million in cash and restricted stock units. (Also see "Sweet deal for shoe grunts.")