) announced that it has acquired Avalon Books, a 62-year-old
publishing company for an undisclosed amount. The acquisition will
add over 3,000 titles to Amazon's already large stock of books. The
terms of the transaction were not revealed.
Amazon Publishing, the publishing arm of Amazon.com, will
publish the Avalon books under its West Coast imprints, including
Montlake Romance and Thomas & Mercer. This Avalon buyout will
further expand its titles in the romance, mystery and Western
The books will be available in print for bookstores and
libraries. While the Avalon books have not yet been digitized,
Amazon intends to add the titles to its Kindle e-reader platform
The acquisition will further extend Amazon's foothold in the
publishing world. The company launched its first imprint in 2009,
and now runs eight separate publishing lines.
With the recent boom in technology and the popularity of ebooks,
Amazon needs to put in its best to have a successful publishing
business with high quality books in its list.
Over the past year, Amazon has been taking every possible step
to expand its catalog and remains one of the favorite players for
book lovers in the fast-growing ecommerce market.
In April, Amazon bought the rights to publish 14 James Bond
books in the United States. Last December, the company bought 450
kid-friendly titles from Marshall Cavendish Children's Books.
Hence, by expanding its own digital publishing arm, the company
will be able to protect losses in its physical book business and
position itself much better for the future.
The book business is changing rapidly due to the increased
customer adoption of Kindles, iPads and other devices that are
making e-books more attractive than hardcovers. Amazon with its
Kindle Fire has strongly penetrated the market, and has now more
than 60% market share in e-readers due to its attractive
WitsView, a research division of TrendForce, expects e-reader
shipments to reach 12.3 million units in 2012 from 7.4 million
units in 2011. According to Gartner, e-reader sales are expected to
peak in 2013 with sales of 28 million units.
In the first quarter 2012 earnings announcement made on April
25, Amazon's revenue was $13.19 billion, which was at the high end
of the guidance range for the quarter and ahead of Consensus
expectations by around 2.2%. Management attributed the increase in
revenue to the growing consumption of digital content across
different categories because of the advantageous value proposition
Amazon was able to provide to its customers.
However, competition from
) through its iBooks app,
Barnes & Noble, Inc.
) remains strong.
Currently, Amazon has a Zacks #3 Rank, which implies a Hold
rating in the near term.
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