Amazon.com to Acquire AbeBooks

This came across the wire today:

SEATTLE & VICTORIA, British Columbia--(BUSINESS WIRE)--Aug. 1, 2008--Amazon.com, Inc. (NASDAQ:AMZN), today announced that, subject to closing conditions, it has reached an agreement to acquire AbeBooks. AbeBooks is an online marketplace for books, with over 110 million primarily used, rare and out-of-print books listed for sale by thousands of independent booksellers from around the world.

For Amazon, this is an excellent acquisition. Amazon fails to handle collectible books well. It is difficult for sellers to post images and direct communication between sellers and buyers, an essential component, is difficult. ABE on the other hand handles these functions well. Hopefully, Amazon will enable ABE to allow these functions.

ABE, already a major player in the used and rare market, will expand into the primary marketplace for collectible books. Their reputation could only enhance Amazon's visibility in those markets.


The deal creates a potentially undesirable situation for both booksellers and buyers. Amazon claims "AbeBooks will continue to function as a stand-alone operation based in Victoria, British Columbia. " I was working for the Austin-based chain Book Stop in the early 90s when it was acquired by Barnes & Noble. Len Riggio, B&N CEO, visited the stores and promised nothing would change. Within a year, B&N gutted everything that made Book Stop special and now the chain is virtually non-existent with one Book Stop, which differs little from a Barnes & Noble, open in Austin.

The direct contact between sellers and buyers will be the first thing to go, quite probably within a year. The fear for Amazon is that sellers and buyers will negotiate deals directly, cutting out the host's percentage. While this is indeed true, the small loss in revenue is nothing compared ot the importance of direct communication. When I was selling books on ABE for Half Price Books, I received multiple email queries a day. Potential buyers wanted to know about various aspects of the book they are interested in (ie points of issue, page numbers, various conditions and the lot). And the need for images ties directly into this.

The consolidation of book sites is bad for everyone. Less competition will only cause prices to rise.