Google Wants You Dead, Amazon!

What did Amazon.com (Nasdaq: AMZN  ) CEO Jeff Bezos do to make so many enemies?

Seriously, I'm asking. Would-be Kindle killers are everywhere, and now comes news from the Frankfurt Book Fair that Google (Nasdaq: GOOG  ) will launch an online bookstore sometime in the first half of next year, News.com reports. Called Google Editions, the store will sell e-books to anyone with a Web browser.

So far, details are few, but I can see how this might work. You log into the Editions "site" and use the new Fast Flip technology to browse as you would in a bookstore, only better. You'd be able to organize results by author, by genre, by title, by publisher, and so on.

The irony is that Editions could be a boon to publishers such as News Corp.'s (Nasdaq: NWS  ) HarperCollins, Pearson's (NYSE: PSO  ) Penguin Books imprint, and Bertelsmann's Random House, all of whom have been working on ways to make more from digital editions.

Publishers and authors have been at odds with Google over copyrights and its Google Books project, which promises to collect, digitize, and preserve out-of-print collections for future generations. Among the worries: Google would enjoy a monopoly on digital presentation of these works, and extract high rates from those wishing to place ads among the classics.

Editions will follow a similar model. According to News.com, the service will be both a bookstore and a portal. Buy directly from Google, and it'll keep 37% of the revenue, sending 63% to the publisher. Buy through another e-tailer, such as Amazon or Barnes & Noble's (NYSE: BKS  ) online store, and Google will receive a sliver of revenue, with roughly 55% going to the retailer and 45% to the publisher.

As with most of its services, Google will either make money via direct sales, or via the ads it presents to the users who search its archives.

Don't expect Bezos to love this idea. Google is getting between him and his customers, just as Amazon shoved aside the traditional bookstore model a decade ago. And just like that, the disruptor becomes the disrupted.

Your move, Mr. Bezos.

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Fool contributor Tim Beyers had stock and options positions in Google at the time of publication. Check out Tim's portfolio holdings and Foolish writings, or connect with him on Twitter as @milehighfool. The Motley Fool is also on Twitter as @TheMotleyFool. The Fool's disclosure policy has a sweet pair of headphones for blocking out disruptions.


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  • Report this Comment On October 15, 2009, at 6:05 PM, rbraseth wrote:

    Let's say Google actually succeeds with such a proposition and snags 25% of the book market. I'm not sure that would be an Amazon killer. Maybe a dent in the fender. Can someone with more information than me make a decent argument that this is a direct threat to the economic health of Amazon. I own both, but purchased AMZN recently at $95. I noticed AMZN went up after hours after the GOOG earnings report. In other words, should a small investor like me even give a hoot?

    Thank you.

    Ralph

    Chicago

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