Amazon to acquire daily deal site Woot.com

The largest Web retailer in the world will buy out the Carrollton, Texas based online retailer that generally offers only one discounted product each day for an undisclosed sum.

"Woot to be acquired by Amazon. More details forthcoming after we pick our eyeballs up off of the floor," read a brief statement by Woot on its website.

Although the details of the deal were not divulged, Seattle based Amazon.com said that it expected the acquisition to close in the third quarter.

The business model
Launched in 2004, Woot is a pioneer in the concept of offering a single item that is available for 24 hours or until it is sold out.

Today the company can boast of 2.75 million registered users who compete against the clock and vie with others trying to grab the best possible deal.

"Woot is about persuading you to buy something you didn’t even know you needed," Mulpuru added.

Woot is also a wholesale distributor and sells products to Amazon as well. The colossal volume that Woot indulges in enables it to get exclusive, discounted inventory, claims Matt Rutledge, Woot’s chief executive.

"If you can’t source exclusive deals, the whole construct of this business model is rather stupid," said Rutledge.

Woot thus draws impulse shoppers which, hitherto, Amazon has not been able to capture.

"Amazon is a destination that is all about focused buying; you go there when you’re looking for something very specific," noted Sucharita Mulpuru, a principal analyst covering e-commerce at Forrester Research.

"Woot is about persuading you to buy something you didn’t even know you needed," Mulpuru added.

Woot’s style is cheeky
Surprisingly, the word customer service does not exist in Woot’s dictionary. The retailer’s website directs inquisitive shoppers to consult Google.

Should a buyer not like an item he buys, Woot advises him to sell it on eBay.
"It is an effort to keep expectations low. Our actual customer service usually gets applause from our members," Mr. Rutledge said.

Mr. Rutledge, in his own derisive way, assured employees that no drastic changes would occur after the acquisition is complete.

"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," he wrote in a communiqué to employees.