The deal, which is expected to close later this quarter, also calls for Wayne, N.J.-based Audible to pay Seattle-based Amazon $30 million over three years in exchange for promotion of Audible's content and services on Amazon.com.
Audible said the deal was valued at about $20 million, based on last week's five-day average closing price of $14.93, with Amazon receiving about 1.3 million shares.
Shares of Audible surged $1.88, or nearly 13 percent, to $16.38 in morning trading. The stock has traded as high as $25 and as low as $6 during the past 52 weeks.
Amazon.com, which is powering forward to establish itself as the Wal-Mart of the Internet, currently sells books, videos, toys and home improvement tools, as well as electronic goods. Amazon stock was slammed hard on Friday after the company said it was cutting 150 people from its workforce. Amazon characterized the cuts as a minor adjustment in its overall expansion plans.
"We're always looking for new ways to deliver more for our customers," Jeff Bezos, Amazon's chief executive, said in a statement.
Both companies said the alliance will give Amazon's more than 16 million customers access to more than 20,000 hours of digital audio content now available at Audible.com. The site features daily audio content from The Wall Street Journal, The New York Times, The Economist and several other magazines and newspapers.
Audible also offers a collection of audiobooks by Stephen King, John Grisham, Scott Adams and other best-selling authors.
Earlier this month, Audible agreed to integrate its playback technology with Microsoft's Internet book software. Microsoft is an investor in Audible.