Could Amazon Become a Monopoly? Part Two

By Bobbie Johnson - February 4, 2012 | Tickers: AMZN, AAPL, BKS | 0 Comments

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Over time we have watched as many bookstores have fallen prey to buyouts and economics. We saw the disappearance of Walden Books, B. Dalton Books, and, more recently, Borders. Surprisingly, Costco and Wal-Mart are both ranked as healthy book sellers but are still far from the league of their predecessors or the still living Barnes & Noble (NYSE: BKS). The fear rippling through the book industry now is that Amazon (NASDAQ: AMZN)  is seeking to overrun the competition from sheer presence and by undercutting prices.

In late January 2012 Amazon made a deal with Houghton Mifflin Harcourt (HMH) for imprint publishing through HMH’s New Harvest division. HMH is most commonly known for their publication of textbooks and other educational materials even though they have been handling fictional works for decades. Some of HMH’s more notable author’s are Harriet Beecher Stowe, Ralph Waldo Emmerson, and Mark Twain.

Amazon has managed to sign an assortment of authors such as Penny Marshal, James Franco, Deepak Chopra, and Tim Ferries to write exclusively for Amazon. However, Amazon is finding that its previous working relationships in the industry have become uneasy. The company is now facing some troubled waters with prior allies. One example is the approach to Barnes & Noble which failed miserably.

Barnes & Noble has declined to carry Amazon products within their stores issuing the following statement:

“Barnes & Noble has made a decision not to stock Amazon published titles in our store showrooms. Our decision is based on Amazon’s continued push for exclusivity with publishers, agents, and the authors they represent. These exclusives have prohibited us from offering certain e-books to our customers.

“Their actions have undermined the industry as a whole and have prevented millions of customers from having access to content. It’s clear to us that Amazon has proven they would not be a good publishing partner to Barnes & Noble as they continue to pull content off the market for their own self interest.”

It is understandable that Amazon seeks to profit from its endeavors even though Barnes & Noble feel as though Amazon is encroaching on their territory. Barnes & Noble are not the only ones feeling that way.

Just to stir the pot a little more, new rumors have recently surfaced of Amazon opening brick and mortar locations. Admittedly, these rumors have surfaced before but Jason Calacanis assures that they come from a reliable source.  Apple (NASDAQ: AAPL) was criticized for even considering opening stores for their products while competition swore that the store wouldn’t last more than a couple of years and would prove to be a costly mistake. Well, we see how that worked out.

Considering that Amazon is willing to take huge leaps of faith at a loss there is reason for other retailers to be worried. Since the company’s inception they have managed to put their hands in books, publishing, video, streaming video, food, electronics, apps, tools, hardware, clothing, fashion, toys, sports, games, along with a wide variety of other pockets all from a virtual arena. Imagine what they could accomplish from a real one. Wal-Mart has faced major criticism over the years for their business practices and their insistence on putting small businesses out of business. Amazon has the potential to inflict a touch of karma on Wal-Mart.

Will Amazon succeed in creating a monopoly? That is truly up to consumer trends and the decisions made from Amazon’s helm but the door is open for it and it just needs a little nudge to be blown wide.

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