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Wednesday, April 29, 2009

Amazon: top source for e-books and e-commerce

On Monday afternoon, Lexcycle, creator of the popular Stanza book reading application for the iPhone, announced that they have been acquired by Amazon. A posting on their website says that they are not planning to make any changes to the Stanza application and customers will still be able to browse, buy, and read ebooks from their content partners. It goes on to say, We are excited to join forces with a company that has innovated on behalf of readers for over a decade and is a pioneer in ebooks. Like Amazon, we believe there is a lot of innovation ahead for ebooks and we could not think of a better company to join during this exciting time.” This acquisition is definitely a bit surprising and has the industry talking. An article from Business Week questions the move given that the Kindle app currently ranks higher than the Stanza app in the Apple iTunes store. The article explains that it could be that Amazon did not want Stanza to be purchased by a competitor or Amazon may be interested in adding some of Stanza’s features to the Kindle app. Another posting from PCWorld notes that Amazon was likely interested in Stanza’s ability to export PDFs, Word documents, and other eBooks which can then be placed on the Kindle. While a posting on the Bits blog indicates that the move will help Amazon strengthen its position on mobile devices, particularly Apple devices but potentially Google Android phones, the Palm Pre, and Windows Mobile devices. Many of the sources are also wondering if Amazon will eventually support more e-reading formats and in particular ePub. We’ll have to wait and see how this plays out but one thing is for sure, Amazon now owns two of the top reading apps for the iPhone.

In addition to acquiring Lexcycle, it was recently reported by Barron’s that Amazon could be responsible for about one third of all U.S. e-commerce. RBC Capital analyst Stephen Ju performed the analysis and his data suggests that U.S. e-commerce through Amazon was about 34% in Q4, up from 27% a year earlier. Ju’s analysis concluded that Amazon is continuing to gain share in the U.S. and there is opportunity for further gains in international online retailing. A posting, from the Amazon blog on Seattle P-I notes that the lack of online sales tax in most states could be a large factor for Amazon’s growth in sales during a recession.

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