In a joke-laden message on the company blog, Woot CEO Matt Rutledge announced today that the company is being acquired by Amazon which has been a minority investor in his company since 2006. The announcement is short of brilliant, I truly had a good laugh after reading the last chapter:
This is definitely an emotional day for me. The feelings I’m experiencing are similar to what I felt in college on graduation day: excitement about getting a check from my folks combined with nausea from a hellacious bender the night before. I remember fondly that time when an RA turned on the lights and yelled “WHO OWNS THESE PANTS?” Except this time, the pants are a company, and the RA is you, and the sixty five hours of community service is a deal that will ensure the Woot.com experience can continue to grow for years and years and years, like a black mold behind the Gold Box. Join us, because together, we can rule the galaxy as father and son. Also, there will be six muffins waiting in the company break room, courtesy of the nice folks at Amazon.com. Welcome to the family!
The financial terms have not been disclosed however Techcrunch believes the price was around $110M in cash. This doesn’t sound like much considering that their rival Groupon is valued at over 1 billion. Internet Retailer estimates Woot’s 2009 sales at $71.6 million but the margins in the consumer products niche are razor slim which is probably the main reason for the low valuation. Groupon on the other hand positioned itself in the services market which can be much more profitable.
Amazon has been on a shopping spree lately, both Zappos and Audible fell victim. From what I see both companies continue to operate as independent subsidiaries and I don’t think Amazon will want to mess with Woot’s successful approach to running the company “with a wall of ideas and a dartboard” as Matt Rutledge put it, alright, and with a basket full of jokes! :-)