Amazon pulls a Microsoft

First comes the news in Computerworld that Microsoft's brand is in sharp decline, falling from #1 in 1996 to #12 in 2006 to #59 last year. Now it seems that Amazon is ready to step into Microsoft's bad-guy shoes with its latest marketing strategy.

According to a Wall Street Journal story today, Amazon is demanding that any publisher that uses on-demand printing in publishing its books use Amazon's BookSurge print-on-demand services if they want their books sold on the top-ranked book e-tailer's Web site.

According to the WSJ story, "Amazon is intent on using its position as the premier online bookseller to strengthen its presence in other phases of bookselling and manufacturing." This affects many university publishers as well as publishers of consumer titles, the story says.

The move represents a further consolidation of power by Amazon as it continues to vertically integrate its book selling operations. Amazon has 15% of the retail book selling market, according to the WSJ story, but as the premier site for finding book titles its influence goes far beyond that. Its outsized impact on book sales is much broader than its market share might imply. Few publishers can afford to not be listed there.

One competitor to BookSurge claims that the print-on-demand business' prices are already higher than those of competitors. If Amazon can use its market power to move more business to BookSurge, the move could hurt competing print-on-demand services and drive up costs for publishers. This carrot and stick approach could allow Amazon to create a captive audience, allowing it to raise prices further for its print-on-demand services. That in turn could lead to higher prices for the books that consumers purchase at and elsewhere.

Amazon has put an innocuous spin on the whole thing, calling it a "strategic decision" that lets the company better serve its customers and authors. In commenting for the WSJ story, Amazon spokesperson Tammy Hovey, "said she doesn't consider the move an ultimatum."

Amazon's attitude appears to be, if publishers don't like it, they can always print their books and sell them elsewhere. Wink wink.

I wonder what Amazon would have said if Barnes and Noble and Borders had demanded that all print-on-demand publishers who want their books sold in their stores use their services?

[Note: A Computerworld story on Amazon's move also appeared on Friday]

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