Which is saying something. Because as you might recall, in 1999, Nasdaq was soaring on the back of the dot-com bubble to levels never before seen.

And here we are amid the worst recession since the 1930s. Haven’t even entered that “all important holiday shopping season” yet, either.

Things are looking pretty good for Amazon (AMZN) right now. Sure, there’s renewed competition from retailers like Wal-Mart (WMT). There are potential sales tax issues and income tax liabilities and a raft of Kindle-killers headed to market. But Amazon’s stock is up 131 percent this year, brokerage firms are upgrading their ratings on the company, and analysts are saying it’s only going to go higher.

Said Citigroup analyst Mark Mahaney: “Near-term outlook very positive as AMZN heads into holiday season fully armed against shrinking/de-stocking offline retailers, with one of the must-have gadgets of the season (Kindle), a significantly strengthening International presence, and soon-to-be closed Zappos acquisition.”

Yeah. Things are looking pretty good right now. But we said that back in ‘99 too–when Amazon had a similar P/E.

Under the terms of the deal, the retailer will acquire all outstanding Zappos shares in exchange for roughly 10 million shares of Amazon common stock, valued at about $807 million, and some $40 million in cash and restricted stock. Amazon (AMZN) says the deal should be completed by fall.

“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,” Zappos CEO Tony Hsieh said in a post to the company blog. “Once the exchange is done, Amazon will become the only shareholder of Zappos stock….

“We think that there is a huge opportunity for us to really accelerate the growth of the Zappos brand and culture,” Hsieh continued, “and we believe that Amazon is the best partner to help us get there faster. Amazon supports us in continuing to grow our vision as an independent entity, under the Zappos brand and with our unique culture.”

“Zappos is a customer focused company,” said Amazon CEO Jeff Bezos in a statement. “We see great opportunities for both companies to learn from each other and create even better experiences for our customers.”

If the shoe fits, right?

Below, Bezos announces the acquisition in person.