Posted by JP Mangalindan in Fortune magazine
June 29, 2010
In the face of Kindle price cuts and wild iPad sales, Jeff Bezos is taking Amazon into new markets and onto every device he can. Will it be enough?
Jeff Bezos has been dismissed before. For most of the dot-com boom, he was assumed to be a one-shot wonder, inches away from having his bookstore, Amazon.com, (AMZN) extinguished by Wal-Mart (WMT). Now, with Apple's (AAPL) mad rush into books and readers, people are starting to wonder again. But Bezos, judging by a sit down interview with Fortune last week, isn't sweating.
So far, the numbers show he doesn't need to. Last quarter, the company reported a profit of $299 million, up 68% from a year ago. Its ebookstore, which started with some 60,000 titles, now offers upwards of 600,000. And though the company won't disclose hard numbers about its Kindle user base -- Bezos has said Kindle owners number somewhere in the millions -- its visibility in the hands of executives, soccer moms and twenty-something professionals reinforces its high-profile status as a go-to device for voracious readers.
But last week, Amazon slashed the price on its second-generation Kindle from $259 to $189 to undercut Barnes & Noble (BKS), which dropped the price of its own eReader, the Nook, from $259 to $199, and announced a Wi-fi-only version for $149. Earlier this week, Barnes & Noble reported a larger-than-expected loss totaling 89 cents per share, eight cents more than what analysts had predicted. It significantly lowered its earnings forecast for 2011 but indicated it would shift more of its resources to the growing ebook market.
And while Bezos doesn't view the iPad, and tablet devices overall, as a threat -- "It's really a different product category" -- the iPad's overnight success, along with Steve Jobs' announcement that users had downloaded 1.5 million books in less than 30 days is a sign that the competition for eReaders' dollars could be heating up – and soon.
One day after Amazon slashed the price on its Kindle, Fortune met with Bezos at Amazon's new headquarters in downtown Seattle, a sprawling 10-building campus of glass, steel and concrete, to discuss the company he built from scratch and where it's going from here.
Read the full piece at Fortune,
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