updated 05:45 pm EDT, Thu July 22, 2010
Amazon gets key Kindle book deals as iPad arrives
Amazon on the same day as it posted financial results obtained a potentially key book deal in its escalating wars with Apple and Barnes & Noble. The online retailer has bypassed publishers entirely and agreed with agent Andrew Wylie to exclusively publish books online by famous authors he has represented. Wylie's agreement gives the Kindle store sole e-book rights to authors such as the late Norman Mailer and John Updike as well as Philip Roth and 17 other writers.
The deal is controversial and has led to Random House, which normally publishes some of the authors, challenging Amazon's rights to publish the books online in a special deal without its consent. It has also decided not to buy any further rights to English versions of Wylie-represented books unless it could reach a truce.
Amazon's move may be part of a heated e-reader war that has seen major competitors cut prices or occasionally quit altogether. It may ultimately be a reaction to Apple, though, as the company has engaged in book deal wars with Apple since the iPad was unveiled to prevent the iBookstore from catching up quickly in availability. Amazon MP3 has long struggled to take any of iTunes' market share and may have left the firm eager to avoid a repeat in books.
CEO Jeff Bezos still acknowledged that Apple's device would play an important role and touted the virtue of tablets. He was "excited by the potential" of tablets and hinted that they could be a "meaningful additional driver" of income at Amazon. Over $1 billion in sales of all kinds at Amazon's store come from mobile devices, he said.
The executive didn't say which devices he expected would thrive, but the remarks may be allusions to his company's own plans. Amazon has been hiring LCD and Wi-Fi experts and bought a multi-touch developer. No tablets are expected in the near future, though, as most leaks surrounding the next Kindle have alluded to a modest upgrade that clings to e-paper.
Amazon may need to improve its performance quickly as it has turned in disappointing results. Although its profit jumped 45 percent year-over-year, to $207 million in the spring, most analysts had predicted significantly higher income. Investors have reacted to the sales harshly as Amazon shares have already dropped 14 percent in after-hours.