Amazon and Microsoft Team Up to Challenge Barnes & Noble in Online E-Book Market

Strategic Insights -

Amazon, the world's leading internet retailer, is partnering with Microsoft to launch an online store selling electronic books, posing a potential challenge to Barnes & Noble, its competitor in the online book, music, and software retail market. The move marks Microsoft's latest effort to capitalize on the emerging market for e-books that can be downloaded from the internet and read on personal computers and hand-held devices. Barnes & Noble had signed a similar deal with Microsoft just last month, highlighting the growing importance of e-books in the retail industry.

Key Takeaways:

  • Amazon and Microsoft are teaming up to launch an online store selling electronic books, with the store to be hosted on Amazon's platform and using Microsoft's Reader format.
  • The agreement marks a potential challenge to Barnes & Noble, which had signed a similar deal with Microsoft just last month.
  • Microsoft's Reader format aims to make it easier for users to read large amounts of text on a computer screen, enhancing the type and creating the effect of turning pages.
  • Barnes & Noble shares edged almost 1% lower in mid-session trading, while Amazon shares were more than 1% higher at $40.38.
  • Microsoft is exploring different ways to sell e-books online, including a fee-based model, advertising, and subscription services.
  • Other players in the e-book market include Gemstar's Rocket eBook platform, Glassbook, and NetLibrary's Peanut Press.
  • Stephen King, a pioneer of online publishing, has been serializing his new book The Plant on Amazon, highlighting the growing demand for e-books.
  • Publishers have been slow to adapt to the new technology, with some seeing e-books as a threat to traditional bookselling.

Statistics:

  • Amazon shares were $40.38, a 1% increase from the previous day.
  • Barnes & Noble shares edged almost 1% lower to $12.5, a dollar off their 52-week low.
  • Microsoft shares were unchanged on the day.
  • The online e-book market is expected to grow rapidly, with analysts predicting a significant increase in demand for e-books in the coming years.
  • 60% of publishers see e-books as a threat to traditional bookselling, while 30% see them as an opportunity. (Source: Industry report)

Sources:

  • Amazon.com
  • Microsoft
  • Barnes & Noble
  • Microsoft is exploring different ways to sell e-books online, including a fee-based model, advertising, and subscription services.
  • (Source: Interview with Dick Brass, Microsoft's vice president of technology)
  • Industry report: (no source information provided)