Friday, October 16, 2009

Walmart-Amazon price war (WMT, AMZN, BKS)

Walmart(WMT) and Amazon(AMZN) are in a bit of a "back-and-forth" over new hardcover book releases.

NEW YORK (AP) -- An online book special offered by Wal-Mart Stores Inc. is turning into a full-fledged price war with Amazon.com.

Wal-Mart got things started Thursday, offering $10 prices on such upcoming hardcover releases as Sarah Palin's "Going Rogue" and John Grisham's "Ford County," a cut of 60 percent or more from the regular cost. Wal-Mart will also offer free shipping.

Amazon.com, the largest online bookseller, matched the $10 price, prompting Wal-Mart to take its offer to $9. By Friday morning, Amazon.com also had priced the books at $9.

The price cuts come at a time when Seattle-based Amazon.com and other sellers have been charging just $9.99 for ebooks, a price that publishers worry is unrealistically low. The reductions also make it increasingly hard for independent sellers, which can't afford such large discounts, to compete for the most popular books.

As these two fight it out, the big-time loser is Barnes & Noble(BKS). While the two giants battle it out over whether to sell at $9 or $10, BKS offers the same titles for $13-21. Not a tenable situation.

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