Amazon in $850 Million Deal for Web Shoe Store Zappos says it is buying, an online shoe store, in a deal worth about $850 million.

(Video: CNBC's Jim Goldman breaks down's purchase of online retailer

Amazon says it will buy Zappos for about $807 million in stock, and also will pay $40 million in cash and stock to Zappos employees. The deal is expected to close this fall.

Zappos' management will continue to run the company from Las Vegas.

Amazon already operates its own shoe and handbag shop under the name