Amazon.Com, Inc. (NASDAQ:AMZN) and Hachette Reach an Icy Agreement

474

By Chris Hillman on November 14, 2014 Consumer Staples

After months of bitter discussion, the standoff between Amazon.Com, Inc. (NASDAQ:AMZN), and the book publisher, Hachette has come to an end..

According to David Naggar of Amazon.Com, Inc. (NASDAQ:AMZN), the agreement will be a benefit to both authors and readers. The CEO of Hahette, Michael Pietsch, says that the agreement is great news for writers.

Obviously, authors associated with Hachette will be breathing a sigh of relief, at least temporarily, for the all-important upcoming holiday season. James Patterson, a well-known author and one of Hachette’s bestselling novelists, has been quoted in saying that books and publishing should be preserved, if not protected by the United States. This deal, at least for the moment, helps to do just that.

Although Hachette did win much of what they were fighting for in this battle, which basically was to set the price for its published titles, did they really win the war? The deal does stipulate that Hachette must include specific financial incentives and offer lower prices.

This conflict can easily become heated again, especially since other large publishers are getting ready to begin negotiations with Amazon.Com, Inc. (NASDAQ:AMZN) regarding this same issue. This could stir the pot, and renew the ongoing battle with Hachette.

The cost is minimal to sell an e-book and the fights over profits and pricing is sure to continue. Amazon.Com, Inc. (NASDAQ:AMZN) controls close to half of the market regarding books and they do not view books as the most profitable retail area. Publisher, like Hachette, on the other side of the fence, aim to protect profit margins of their books and charge a higher rate for e-books to accomplish this.

Members of the authors association of America wanted to hold Amazon.Com, Inc. (NASDAQ:AMZN) responsible for the way that they have been acting. In fact, they planned to urge an investigation from the Department of Justice to hold Amazon.Com, Inc. (NASDAQ:AMZN) for abuse of marketing power. This potential threat could be why Amazon.Com, Inc. (NASDAQ:AMZN) had decided to give in, at least for now. This deal, no matter how long it may last, is not likely to end the dispute and heated discussion regarding e-books.

Amazon.Com, Inc. (NASDAQ:AMZN) started out as an online bookstore, but they soon became a leader as an internet based company. They now sell everything from books, software, electronics, clothes, food, toys, furniture and jewelry. They are also the producers of the Kindle e-reader, the Kindle Fire tablets as well as the Fire TV and the Fire Phone.

Amazon.Com, Inc. (NASDAQ:AMZN) has different websites for the United States, UK, Ireland, Canada, France and Germany as well as the Netherlands, Spain, Italy, Brazil, Australia and Japan. Sites are soon to be coming to South East Asian countries as well.

Amazon.Com, Inc. (NASDAQ:AMZN) opened the market today at 317.12 and at 11:00 A.M. Eastern Standard Daylight time, it has risen to 328.78. The 52 week outlook ranges from 284.00 to 408.06. The institutional ownership is 67% with the market capital being 152.23B.