Amazon Vs. Barnes & Noble: The Tale of the Tape

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So Barnes & Noble, the world's largest retail bookstore chain, is entering the the ebook market in a big way. As the company announced today,

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Amazon Vs. Barnes & Noble: The Tale of the Tape

  • Amazon Vs. Barnes & Noble: The Tale of the Tape

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    barnes_resize.jpg
    So Barnes & Noble, the world's largest retail bookstore chain, is entering the the ebook market in a big way. As the company announced today, it's promising "more than 700,000 titles, including hundreds of new releases and bestsellers at only $9.99, making it the world's largest selection of eBooks available in one place." This places B&N in direct competition with Amazon.com, whose ebook library is pegged around 330,000 titles (per the NYT), and which is intended chiefly for its successful but expensive Kindle device.

    Score round one for B&N? Larger library, similar price points per book, plus a "device-agnostic eBook application" that allows you to download texts to your iPhone, BlackBerry, PC, or Mac--gee, that sounds like an overwhelming advantage. But let's compare the two companies a little more closely...

    Barnes & Noble talks a big game. Its company profile states that, "Barnes & Noble, Inc. (NYSE: BKS), the world's largest bookseller and a Fortune 500 company, operates 777 bookstores in 50 states. Barnes & Noble is the nation's top bookseller brand for the sixth year in a row."

    But let's remember that traditional book retailing is in fact a shrinking market. B&N's market capitalization is currently about $1.24 billion, compared to Amazon's nearly $38 billion. While B&N is a solid stock, its share price has declined about 33 percent in the past five years to a current $22. Amazon, by contrast, has doubled in value over the same period to over $80 today.

    Net sales for their most recent quarters are, according to each company, $1.1 billion for B&N (down 4% for the same period last year) and $4.89 billion for Amazon (up 18 percent compared to the same period last year).

    B&N, a much smaller, less diversified company than Amazon, is branching out because it needs to. Kindle, a small, niche product for Amazon, is but one aspect of its larger content download businesses. It also sells music and video from its site, judged by research firm Nielsen Online to be one of the 10 biggest destinations on the Web.

    Also, while Amazon already has Kindle on the market today, B&N is promising "a strategic commerce and content partnership with Plastic Logic, whose eReader device is especially designed for business professionals. Barnes & Noble will power the eBookstore for the Plastic Logic eReader device. The ultra thin 8.5 x 11 inch wireless eReader is slated to debut in early 2010." No price is mentioned for a product that is yet to exist. (Also--Plastic Logic? Terrible name. Please change that when you bring it to market.)

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    And while it may not want to cannibalize its Kindle business by venturing onto other mobile platforms (iPhone, BlackBerry, etc.), Amazon can certainly afford to do so. Just this past May, the company announced a Kindle app for the iPhone.

    Competition is certainly a good thing for ebook consumers, particularly those of us who don't want to shell out the extra money--assuming we already own a smartphone--for a Kindle (visit that page here). But the question remains as to whether the new B&N effort (visit www.barnesandnoble.com/ebooks) isn't coming too late and too little to the competition.

     
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