http://disqus.com/by/ColfaxGreeley/enThu, 23 Jul 2009 13:50:58 -0000http://streetcapitalist.com/2009/07/23/a-look-at-the-zappos-amazon-deal/#comment-13225332<p>Gross Revenue is ~$1.1b. This includes the revenue of product that was ultimately returned, free of charge (as is the Zappos policy: not sure what size to order? Get both the 10 and the 11 and send back the one that doesn't fit). Net revenue is roughly $700m. Operating Income is estimated by the Wall Street analysts covering AMZN to be between $20-$35m. This deal was done for $885m. This deal was much worse from an accretion / dilution perspective than the 22x P/E to which you refered. That isn't to say it'll end up being a bad deal. Remember, Amazon was just a seller of books online with a cult following. Amazon could have just taken out an incumbent threat and if you like Bezos, you should be willing to give him the benefit of the doubt.</p><p>I have no position in the name</p>ColfaxGreeleyThu, 23 Jul 2009 13:50:58 -0000