Why Amazon Tolerates Zappos’ Extreme Management Experiment

In 2009, Amazon.com bought a small competitor, online shoe merchant Zappos, for $1.2 billion. It was an unusual deal in that Amazon  promised to leave Zappos alone so long as it hit certain financial targets. Tony Hsieh, CEO of Zappos, wrote the following year that the relationship between Zappos and Amazon was “governed by a document that formally recognizes the uniqueness of Zappos’s culture and Amazon’s duty to protect it. We think of Amazon as a giant consulting company that we can hire if we want.”