Shop Talk

Check Out Line: Borders launches e-bookstore … finally

Check out Borders Group finally launching its e-bookstore.

The No. 2 U.S. bookstore chain’s electronic bookstore comes nine months after rival Barnes & Noble debuted its Nook e-reader and three months after Apple introduced its popular iPad tablet computer, allowing both companies, and Amazon.com, which sells the Kindle e-reader, to get a head start.

No worries, says Borders, which saw sales at its namesake superstores open at least a year and on its website fall 11.4 percent in the first quarter.

“We’ll take market share just by turning it on,” said Mike Edwards, president of Borders Inc, the company’s main operating business.

Edwards said Borders had data and email addresses for the 38 million customers in its loyalty program and about 700 stores at which to promote its virtual bookstore, which will help it catch up. The company’s goal is to secure a 17 percent share of the e-book market by July 2011.

“A lot of people have said, ‘You’re kind of late to the game,’ and I’m saying, ‘the game actually just started,’” Edwards said.

However, larger rival Barnes & Noble recently said it has already won 20 percent of the U.S. e-books market since launching Nook, exceeding its share of the physical book market.

from MediaFile:

Hey Woot, its Amazon. You’re rich.

You gotta figure that every web entrepreneur waits (prays!) for a call or email that goes like this: "Hey dinky but popular outfit with a loyal customer base -- super-huge company here. We want to buy you and make you rich. Have a nice day."

Woot.com got a call like that from Jeff Bezos's Amazon.com. They announced the deal on Wednesday. It's speculated that Amazon paid about $110 million for the company that sells only one item per day at discounted prices, until inventory runs out. The next day, it moves on to another item such as you know, a water gun or a home pedicure kit.

Already, Woot is playing a part in the e-book reader price war between Amazon and its Kindle, and Barnes & Noble and its Nook, by selling Kindles cheap. (But sorry,  It sold out before many of you woke up.)

The deal opens up a monstrous growth opportunity for the suburban Dallas outfit. But it doesn't appear to have taken the starch out of the company's irreverant CEO Matt Rutledge, who told employees that they should continue doing what they do best -- whatever that is.

We plan to continue to run Woot the way we have always run Woot – with a wall of ideas and a dartboard. From a practical point of view, it will be as if we are simply adding one person to the organizational hierarchy, except that one person will just happen to be a billion-dollar company that could buy and sell each and every one of you like you were office furniture. Nevertheless, don’t worry that our culture will suddenly take a leap forward and become cutting-edge. We’re still going to be the same old bottom-feeders our customers and readers have come to know and love...

If that doesn't give you an idea about the kind of shop Amazon is picking up, perhaps the video above -- which, ahem, features a rapping monkey puppet -- will. Oddly enough, this crazy-like-a-fox energy reminds us of another clip showing a bunch of wacky young Internet entrepreneurs  giggling about their startup's pending acquisition by a super-huge company. That would be when Google bought Youtube. For $1.6 billion. Chad and Steve, yeah they had a nice day.

Check Out Line: Amazon’s board shrinks

Check out the downsizing at Amazon.com.

No, no, it’s not a big corporate layoff. But the e-commerce giant is cutting the size of its board of directors by 12.5 percent.

Of course, once you’ve lost the part of “the center of gravity in the Internet,” why even try to replace him.

That phrase is what Amazon CEO Jeff Bezos is quoted as calling John Doerr and Kleiner Perkins Caulfield & Byers, the Silicon Valley Venture Capital firm where he is a partner.

Amazon said in March that Doerr, who has served on the board for 14 years, will not stand for reelection.

In the company’s annual proxy statement released on Wednesday, Amazon said it will not replace Doerr, but instead cut the size of its board from eight to seven. The seven nominees are all current directors of the company and all but one have served for at least six years.

Also of interest in the proxy, CEO Jeff Bezos only made a salary of $81,840 again last year and all his other other compensation was $1.7 million, which consisted of costs for Bezos’ security. Sure, he owns about $13 billion in Amazon stock, but you’d think they would have at least given the guy a Kindle or something.  (Oh,  maybe they did, judging by this Reuters photo).

Need an inside source? Here’s eBay

EBay, the online marketplace where shoppers can find anything from toys to cars to designer handbags, has launched a digital magazine.       The magazine, www.theinsidesource.com, is geared to “inspired shoppers” and features stories based on what eBay’s millions of users are looking for, according to the publication.

It will feature articles, analysis and opinions from eBay shoppers and journalists. The site will also point to eBay’s most-watched and most-searched items.   “The Inside Source content will reflect what inspires us on eBay, from a profile of an art dealer discovering museum-quality pieces to a breakdown of the hottest trends in handbags,” said Managing Editor Meredith Barnett.      Perusal of the site revealed postings on a variety of topics, from Kim Kardashian’s style and cocktail rings for under $30 to Jane Birkin’s kitchen and items made of hemp.           The magazine is part of the company’s recent marketing efforts to reenergize its marketplaces business, which competes with a host of e-commerce rivals, including Amazon.com.

(Photo: Screenshot of www.theinsidesource.com)

Bezos and Zappos.com in a garden, K-I-S-S-I-N-G

Amazon.com’s Jeff Bezos puts his quirky on in an online introduction geared to employees of Web shoe retailer Zappos.com.

The chief executive of the world’s largest online retailer, in an 8 minute YouTube video posted on Zappos’ website, told folks he “gets all weak-kneed when I see a customer-obsessed company.”

Bezos, wearing a purple-red button-down shirt and standing in a very non-corporate-looking garden under natural light — which gives the spot a quasi-online video dating feel — enthuses about Zappos and his excitement over acquiring the zany online shoe company. Amazon announced on Wednesday the approximately $928 million deal, mostly in stock.

The video was included in an online letter posted by Zappos’ CEO Tony Hsieh to employees, in which he assures staff that the acquisition is amicable and  suggests a headline for the deal as “Zappos and Amazon sitting in a tree.” Readers will remember the next line of that juvenile rhyme is “K-I-S-S-I-N-G.” Online video dating moves fast.

Using an easel and a large pad of white paper (uh-oh, vaguely corporate feeling is invading the garden) Bezos explains what he calls the short list of things he learned running Amazon for the past 15 years — “obsess over customers”; “invent”; and “think long term.”

He tells war stories about the early days of his company, some of which are admittedly endearing – as when he admits that Amazon’s first customers were the employees’ mothers, or describes a software snafu.

Check Out Line: Can a $298 laptop jump-start back-to-school?

Check out efforts to get serious back-to-school shopping underway.

Wal-Mart announced plans to start selling on Sunday a Compaq Presario laptop for $298.

Gary Severson, Wal-Mart U.S.’s senior vice president of home entertainment, told Reuters he thought the deal represented a “screaming value.”

The retailer also plans to cut the price of an Acer laptop with an 8-hour battery by $50 to $548. The computer has 3 gigabytes of memory, a 320 gigabyte hard drive and qualifies for a free upgrade to the Windows 7 operating system when it is released.

Retailers ranging from Wal-Mart, to Target, to J.C. Penney have outlined their plans to lure back-to-school shoppers. Penney is using a special website, jcp.com/teen, to reach web-savvy teenagers who shop for themselves in the back-to-school period but may have less money to do so this year.

But retailers are confronting cash strapped shoppers, who are watching their pennies as the unemployment rate rises and the housing market remains depressed.

Asked for his view of the back-to-school season, the Chief Executive of UPS, Scott Davis, said on a conference call it was too early to tell.

Amazon.com hopes results take spotlight off snafus

Amazon.com reports second-quarter results this week and the online retailer is likely hoping projected market share gains take the focus off of two embarrassing Kindle blunders last week.  

 On Friday, Amazon acknowledged that it had deleted certain purchased e-books from the Kindles of an undisclosed number of owners. Why? Turns out that Amazon never had the rights in the first place to sell digital copies of the works. Poof! They went away.      As one blogger on Gizmodo wrote: “If you can’t be sure that you own something after you pay for it, what’s the point?”        Amazon later acknowledged that it should have alerted its customers.   “These books were added to our catalog using our self-service platform by a third-party who did not have the rights to the books.  When we were notified of this by the rights holder, we removed the illegal copies from our systems and from customers’ devices, and refunded customers,” said a spokesman. 

Ironically, the books at issue were George Orwell’s totalitarianism-themed classics “1984″ and “Animal Farm.”   The vanishing book episode was the second public relations snafu in a week for the Seattle-based company, whose $299 Kindle or $489 Kindle DX are touted as the future of reading. On Wednesday, a lawsuit was filed in Seattle by a Kindle owner claiming its protective cover, which is sold separately, actually can end up damaging the device. The lawsuit is seeking class action status.   Kindle users download books, magazines and newspapers from the Kindle Store, and are billed accordingly.   Amazon watchers aren’t sure just how profitable the device and its downloaded content are for the company, and a host of variables from competition to the economics of publishing complicate the discussion.

But today, Credit Suisse estimated the company will gain about $420 million in total Kindle revenue – devices and content – in 2009, growing potentially to $3.9 billion by 2014.   Analyst Spencer Wang estimates a gross profit per unit of $69 for the Kindle, based on an estimated cost of goods of $230. That’s a 23 percent gross margin, which could rise north of the 30s as cost of goods decline, he wrote.   Wang acknowledged that “growth in the Kindle is likely to cannibalize to some extent Amazon’s core business of selling printed books” and said the Kindle should not be viewed as a “material driver to Amazon’s fundamentals in the medium term.”

(Photo: Reuters)

Check Out Line: Buying basics buoys big chains

Check out the ten largest U.S. retailers.

The National Retail Federation’s STORES magazine is out with its annual ranking of the top 100 retailers.

The list shows that U.S. consumers have been focused on bargains and basic necessities, such as food and medicine.  Wal-Mart tops the lineup, followed by Kroger and Costco.  Home Depot fell from No. 2 in 2007 to the fourth spot in 2008 as many shoppers decided to cut back on costly home-improvement projects.

Home Depot, Lowe’s and Sears Holdings were the only members of the top 10 to see their revenue fall in 2008.

Some other rankings that may interest you: Amazon.com is the 19th largest retailer, ranking higher than well-known chains such as J.C. Penney, 7-Eleven and Gap.  Apple’s stores and iTunes combined hold the 40th spot, topping chains such as Nordstrom, Whole Foods and Barnes & Noble.

The companies were listed by annual revenue, which may include estimates for private or closely-held companies.  Revenue from major non-retail operations were excluded when possible.

Also in the basket:

“Don’t look at me, I’m just a kid — bill my parents!”

Ah, youth. How free and easy it all seems. Especially after the launch of a new payments system, BillMyParents.

The system geared to teens and tweens — who ideally have good relationships with their hopefully indulgent parents — allows parents to approve purchases coveted by their kids and foot the bill.

The idea of the youth payment system is to capture some of the $40 billion spent by kids who end up shopping at traditional retailers only because without a credit card, they have no way to pay for stuff online, says the company’s chief executive, Jim Collas. Collas is the former chief technology officer for PC maker Gateway.

Whereas consumers have a host of options in online payments systems, including eBay‘s PayPal, Google Checkout and Checkout with Amazon, Collas says his system is the most convenient for parents and teens.      Parents pay 50 cents per total transaction after they approve and pay for their kids’ shopping lists that are automatically sent to them via email or text, and merchants pay a percentage to BillMyParents.      Currently, BillMyParents is powered by Amazon.com with Amazon’s shopping cart integrated into the website. Kids can access the entire inventory of the global online retailer.

BillMyParents, which is owned by Socialwise Inc, plans to have up to a dozen more retailers participating within nine months and the ultimate goal is for the BillMyParents payment button to be integrated into the online retailers’ websites.

Besides the retail angle, Collas sees a huge opportunity in the gaming world, which allows kids to buy virtual goods online — a market estimated at over $1 billion — as they play their favorite video games.      Through partnerships with online gaming sites like Artix Entertainment and social networks, young users will be able to share information, showing off what they’ve ordered and seeing what their friends’ nice parents just bought them. An opt-out is available.      Collas’ goal, he said, is to become “the de facto standard” for youth payment systems. He added: “We do expect to gain momentum very quickly.”

(Photo: BillMyParents)

Check Out Line: Recession? Not at Amazon.com

Check out the sales surge at Amazon.

The online retailer beat Wall Street expectations for quarterly earnings and revenue as lowered prices lured more shoppers online. It also benefited as sales of its Kindle electronic reader gained momentum.

The company increased revenue an unexpectedly strong 18 percent as cash-strapped consumers went shopping online, and Amazon’s own discount shipping program spurred purchases. 

Promotions and cost-consciousness — as customers eschewed a trip to the mall in favor of browsing for free online — helped it post a 21 percent sales gain in North America. 

“It tells you how well they’re executing and winning business with customers and increasing share of wallet with their consumers,” said Steve Weinstein at Pacific Crest Securities.

He noted that Amazon’s U.S. business was growing faster than the overall e-commerce market. “It’s an incredible feat.”

Chief Executive Jeff Bezos said sales of the company’s Kindle had “exceeded our most optimistic expectations.”