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Amazon acquires printing fulfillment firm BookSurge

April 4, 2005

Internet retail site Amazon.com has acquired 100 percent of printing fulfillment firm BookSurge, which offers a catalog of thousands of book titles in which users can print on demand.

"Print-on-demand has changed the economics of small-quantity printing, making it possible for books with low and uncertain demand to be profitably produced," Greg Greeley, vice president of media products for Amazon.com, said in a written statement.

Terms of the deal were not disclosed. The move likely reflects Seattle-based Amazon's continued efforts to add new revenue streams and counter competition from online rivals such as eBay (Quote, Chart) and Overstock.com (Quote, Chart). The heated competition has forced Amazon to lower prices in order to keep customers.

Although Amazon.com generates twice the revenue as its main rival eBay, it has a distinct disadvantage because it must maintain and operate warehouses throughout the world. eBay has no need for such space, because it sells a service not a product. Even with only half the revenue, eBay is nearly three times more profitable than Amazon.

Enter a deal like BookSurge, whose ability to offer Amazon a product without burdening the online giant's already behemoth distribution network, is a trend that will likely continue for the company in the future.

The company will now offer "inventory-free book fulfillment" to publishers through BookSurge Publisher Services and to authors through BookSurge Publishing. In addition, retailers, wholesalers and distributors can leverage the BookSurge Direct wholesale platform, according to the company.

"BookSurge makes it possible to print books that appeal to targeted audiences, whether it's one copy or one thousand," Greeley said. "Our new relationship with BookSurge will provide Amazon customers an ever-expanding selection of titles that are not available through other channels. Thanks to print-on-demand, 'out of print' is out of date."

As previously reported by internetnews.com, Amazon.com has been moving toward the world of e-books and other downloadable products for some time. The company created a business group focused on global digital distribution and created Worldwide Digital Group to "centralize its digital platform and aggressively scale it across product lines and geographies.

In the past, Amazon has also worked to maneuver itself into position to take the lead in digital publishing. In 2001 the company did an eBook deal with Adobe Systems that added nearly 2,000 e-books to its catalogue.

Although the battle over e-book sales continues -- Internet portal Yahoo also has e-book sales deal with four major publishing houses -- e-books are still a small part of the current online book market, but both publishing companies and online retailers clearly are expecting significant growth. When that might happen is the open question.

"BookSurge is dedicated to creating better opportunities for authors and publishers, and our new relationship with Amazon.com will allow us to do just that," said Robert Holt, BookSurge's chief executive officer. "We are delighted to become a part of the Amazon family and look forward to helping even more publishers and authors find a profitable outlet for their books."

Source: Internet News



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