UPDATE: For the latest on this story, see Here's Why Amazon Bought Zappos.

This one's a complete shocker. Amazon has acquired the ecommerce footwear company Zappos - confirmed in an open letter from Zappos CEO Tony Hsieh.

The deal is officially for $807 million in Amazon stock, plus about $40 million in cash and restricted stock, based on the July 21st closing price (UPDATE: with the rise in value of Amazon's stock today, the deal is now worth more than $900 million). Here's the gist from the Zappos CEO letter:

This morning, our board approved and we signed what’s known as a “definitive agreement”, in which all of the existing shareholders and investors of Zappos (there are over 100) will be exchanging their Zappos stock for Amazon stock. Once the exchange is done, Amazon will become the only shareholder of Zappos stock.

Amazon CEO Jeff Bezos added in a statement that "Zappos is a customer focused company. We see great opportunities for both companies to learn from each other and create even better experiences for our customers.” He also created a video discussing the deal that we've included below:







