Topical items and views on the impact of digitisation on publishing and its content and the issues that make the news. This blog follows the report 'Brave New World', (http://www.ewidgetsonline.com/vcil/bravenewworld.html ), published by the Booksellers Association of the UK and Ireland and authored by Martyn Daniels. The views and comments expressed are those of the author.
Thursday, October 27, 2011
For Book Depository Read Amazon
The UK OFT (Office of Fair Trading) has today cleared Amazon’s proposed acquisition UK Internet retailer The Book Depository. Many objections were submitted by the UK trade who were mindful of the growth of Amazon and the leverage that The Book Depository potentially gives it.
The ruling was not unexpected and was based on UK trading today and found that The Book Depository's share of UK sales was relatively small, accounting for between two to four per cent of online retailing of hard-copy books. They state that 'we are satisfied that this small increment to Amazon's position does not raise competition issues. The evidence showed limited competitive constraint from The Book Depository which, in fact, has shown most growth and expansion in overseas markets rather than the UK.’
Whilst the decision is sound today the merger does knock out a viable alternative to Amazon who has clearly demonstrate its ability to be both innovative and grow rapidly. The question now is who is the viable alternative and what levels of growth have they been able to achieve? Comparing a raising star to today’s market to many who are not exactly setting the world alight is valid but hardly fair trading.
Amazon clearly made a wise move in buying The Book Depository and got it under the OFT radar on today’s measures. If we were to extrapolate the growth and sales to see position that The Book Depository may have achieved in the coming years without Amazon and the power that the consolidation could deliver then the decision may have been tighter.
Just like they did some 13 years ago, some today are pointing to Amazon’s dip in profits and raising questions about further growth and returns. After all, accountants will often only see one goose and are unable to account in the books for the goose that lays the golden egg.
The full ruling can be read on the OFT site.
Posted by Martyn Daniels at Thursday, October 27, 2011
Labels: amazon, oft, the book depository
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