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Amazon Expands ‘Traditional’ Book Business With Acquisition of AbeBooks
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Posted On August 14, 2008
Despite all the fuss and furor about Amazon’s (www.amazon.com) push into digital book sales via its Kindle ebook reader and other content downloading routes, the tried and true sale of print books remains the core of Amazon’s book sale business—for now, at least. A significant portion of those sales come from used books supplied by third-party sellers. Canada-based AbeBooks (www.abebooks.com) represents an online inventory of more than 110 million used, rare, and out-of-print books from about 13,000 independent booksellers worldwide. The recently announced acquisition of AbeBooks by Amazon is expected to close by the end of the year. Neither company would supply any details on plans to integrate collection listings or operations at this time.

The announcement of the acquisition indicated that AbeBooks would continue to operate as an independent subsidiary with offices in Canada, Germany, and the U.S. Russell Grandinetti, vice president of books for Amazon.com, was quoted as saying, "As a leader in rare and hard-to-find books, AbeBooks brings added breadth and expanded selection to our customers worldwide. [It] provides a wide range of services to both sellers and customers, and we look forward to working with them to further grow their business." Hannes Blum, CEO of AbeBooks, stated, "This deal brings together book sellers and book lovers from around the world, and offers both types of customers a great experience. We are very excited to be joining the Amazon family."

It would seem that the improvement in customer experiences would necessitate integrating operations and inventories to make purchasing books simple from the websites of both parties. However, Amazon does not always integrate inventories, even for its own established subsidiaries. For example, listings for books on Amazon.co.uk do not appear in searches on Amazon.com, nor do Amazon.com’s listings on Amazon.co.uk. So the press release statement that AbeBooks will function as a stand-alone operation with all its websites intact, including the Canadian website with Canada-specific content, would seem a familiar approach for Amazon.

AbeBooks started selling books in 1996, only a year after Amazon opened operations. It has numerous websites around the world: Abebooks.com, Abebooks.ca, Abebooks.co.uk, Abebooks.de, Abebooks.fr, Abebooks.it, and Iberlibro.com. It sells an estimated 10,000 books a day, including new books, stemming from more than 3 million searches per day by more than 1.5 million unique visitors a week. For member booksellers, it offers free HomeBase inventory management software and a PricePartner plug-in for changing prices on books. It offers affiliates support through the Google Affiliate Network (formerly DoubleClick Performics) platform.

AbeBooks also offers a lot of reader services, some of which compare with some Amazon services. It has enewsletters, blogs, Authors’ Corner interviews, a book fairs directory, the Avid Reader book club, community forums, a wiki, and book buyer services such as BookSleuth and GiftSleuth. Its own subsidiaries include BookFinder.com, a price comparison search engine tracking 150 million books; FillZ.com, a marketplace management tool for loading inventory to list on more than 20 different fixed-price marketplaces, including multiple Amazon websites; Gojaba.com, building online bookstores in emerging markets like Sweden, Russia, and Brazil; and Chrislands.com, a service designing and operating online bookstores. It also has a 40% minority interest in the popular LibraryThing.com site, home of socially networked avid book readers, and something of a competitor to the Amazon investment, Shelfari.

In April, Publishers Weekly reported that Amazon books sales continued to soar in comparison with bookstores. An R.R. Bowker study reported Amazon’s share of the 2007 consumer book market at 21%, while Fairfield Research reported it at 30%. Its North American media sales, though not broken down for books and including DVDs, CDs, music, software, etc., had grown 29% in 2007, i.e., $4.63 billion. One analysis indicated that in 2005 some 23% of sales were for used goods and an estimated $63.2 million in profits came from used books. However, some commentators indicated that Amazon’s goal in this area may reflect an overall commitment to its "Earth’s Largest Bookstore" goal, a goal requiring as broad an inventory of deliverable books as possible.

In 2003, the privately owned, German magazine and media company, Hubert Burda Media, acquired a majority share in AbeBooks. Christoph Braun, managing director of Burda Digital Ventures (now renamed Acton Capital Partners), is also chairman of the board at AbeBooks. Burda Digital Ventures/Acton Capital Partners has been expanding its investments into Canadian consumer internet opportunities. In February, it invested several million dollars in Nexopia, a Canadian youth-oriented social networking site. Boris Wertz, formerly COO at AbeBooks and still a director and consultant there, was appointed CEO at Nexopia. Commenting on the Amazon acquisition of AbeBooks, Wertz reported on the W Media blog, "this deal … makes tremendous sense for everybody involved. … AbeBooks now belongs to a company that is built on an aggressive investing gene—and it will be fun watching from the sidelines to see where Jeff [Bezos] and team can take AbeBooks over the next years."


Barbara Quint was senior editor of Online Searcher, co-editor of The Information Advisor’s Guide to Internet Research, and a columnist for Information Today.


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