Wednesday, May 19, 2010

Summing Up the Strategies

Last week, we spent some time looking at the strategies of Amazon, Apple and Barnes & Noble, three providers of electronic reading devices. I promised to return to the subject and talk about Google, who is shortly expected to debut their own Google Editions, a new browser-based e-book sales platform.

Interestingly enough, The Bookseller had an article yesterday, talking about the strategies of Amazon, Apple and Google. We'll compare my comments to theirs as we go along:

Amazon: I said that, on the surface, Amazon's strategy of selling products at a loss makes no sense. But I reminded readers that Amazon is vertically integrated as a manufacturer, wholesaler and retailer. They can take a hit in one part of their supply chain while benefiting another part of the chain. So selling e-books at a loss promoted the sale of the Kindle and helped make Amazon the largest e-book retailer in the United States.

The Bookseller said much the same thing, indicating that e-books are a way of attracting consumers to the site. "If you buy low-priced e-books on one Amazon visit, you may return to purchase a much more expensive item."

Apple: I said that Apple is very clear that their main business is the sale of electronic devices, not electronic books. Their entry into publishing is intended to enhance their iPad sales. Reading is an incidental function to their multi-function device.

The Bookseller agreed, saying "Apple's strategic objective is ... 'to create a great content experience to drive sales of consumer electronics...'"

Now we come to Google. The Bookseller said that Google is an advertising business. "It makes sure all content is available on Google so that you start your purchasing journey there and Google can sell ads on it. Therefore its objective is for everything to be free."

I absolutely agree that Google's focus to date has been to promote its search engine business because that's how they are able to make money selling ads. However, I'm not convinced that the company's ambitions stop there.

Back on September 17, 2009, here, I said:
And what about Google? Google’s ambition to copy every book in the world could lead to its becoming the biggest bookstore in the world.

Thus far, Google has stuck to its plan to remain the largest search engine in the world. Copying the world’s books is a strategy to strengthen Google's search engine business. The company provides links to buy the books it displays. It remains to be seen whether Google has larger ambitions in the publishing world.
I'll stick with that opinion.

You can read the entire article in The Bookseller here.

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