Wednesday, May 02, 2012

Amazon Rivals Decide Offense Is Their Best Defense

In another interesting turn of events in the ongoing bookstore wars, it appears that new business coalitions are being formed to combat the dominant e-book position that Amazon has carved out for itself.  Just yesterday came word that Microsoft and Barnes & Noble were teaming up on a venture that will bring several hundred million dollars to B&N.

Then, this morning I heard that Target will quit selling Amazon's Kindle in its stores.  Although Target management denies it, this almost has to be related to Apple's rumored decision to open 25 mini-Apple stores within Target storefronts.  Apparently, the chain will continue to sell the Nook and other e-book readers, but the Kindle is out even though it is the most popular reader sold in Target stores right now.

This LA Times article offers the details, but here are a couple of highlights:
Barnes & Noble Inc.'s prospects against rivals Inc. and Apple Inc. in the fast-growing digital reader business just got a big lift thanks to a $605-million investment from Microsoft Corp.
For the nation's No. 1 bookstore chain, the infusion will help its Nook business better compete against the top-selling Kindle e-reader and iPad tablet computer and relieves some of the pressure on Barnes & Noble to turn a profit on the Nook.
It's also a good deal for Microsoft, which is spending barely 1% of its $60-billion cash reserve to gain a bigger presence in the e-reader and tablet markets ahead of the widely anticipated launch of its Windows 8 operating software later this year. As part of the deal, Windows 8 will feature a Nook e-reader app, the companies said.
As for the Target/Apple situation, it makes sense for Apple to open the mini-Apple-stores in markets that are too small to support full-fledged Apple locations.  Techies started chatting about this possibility back in January, but nothing has happened yet as far as I can tell.  Does Target's decision to dump the Kindle mean that the mini-stores are imminent?  

And the war drums beat on...

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