The deal is likely to mean that audiobooks will become the latest addition to its fast-growing music download store.

It's not clear what will happen to Audible's deal with iTunes, if anything -- the company is the chief supplier of audio books to Apple's music service. However, Audible seems a good fit for Amazon considering the retailers core business is book sales.

Amazon is flush with cash at the moment, posting over $1 billion in free cash flow for 2007. That metric is typically a good barometer of the overall health of a corporation, as it indicates how much money can be spent while mantaining currently available resources.

The Kindle, Amazon's electronic book reader, will at least initially not benefit from the company's acquisition of Audible. There is no way for the device in its current iteration to play back audiobooks.

However, its not all that far-fetched to believe that with a library of 80,000 audiobooks in tow, Amazon will likely look to be adding audiobook support in the next Kindle version.

The terms of the agreement call for the purchase of all outstanding shares of Audible at a price of $11.50 per share, which is roughly equal to the Thursday afternoon trading price. In addition, Amazon will assume all of Audible's outstanding stock-based awards.

Audible was founded in 1997 and has operations in the US, UK, Germany and France.