February 26, 1998
Bertelsmann Plans to Launch
World's Largest Online Bookstore
By DOREEN CARVAJAL
Bertelsmann AG, the German media conglomerate, announced plans Wednesday for a global electronic bookstore that has the potential to become the world's largest merchant of books. The entry of Bertelsmann, with its vast resources, publishing experience and international distribution network, would challenge the Internet pioneers that now reign in electronic bookselling.
Bertelsmann said it would open for electronic business sometime this year with a venture tentatively called Books Online. It will offer books in major languages from all publishers with discounts that could compete with the rates of dominant electronic booksellers like Amazon.com, the Seattle-based pioneer that has been battling for primacy with Barnes & Noble's new on-line venture.
"It's the first time that you'll be able to buy a book in any language, anytime, any place and have it locally fulfilled," Chip Austin, the newly appointed chief executive of Books Online, said. For
example, he added, a customer could order a book from Britain even if it had not been published yet in the United States.
Although Bertelsmann is moving late into the digital world behind Amazon.com, Barnes & Noble Inc. and, shortly, Borders Group Inc., the company boasts that it has resources no rival can match: an elaborate data base of more than 35 million active book and music club members in North America and Europe and a distribution network of more than 40 warehouses in the same regions.
"Our goal is not to be No. 2 or No. 3," Markus Wilhelm, the chief executive of Doubleday Direct who is overseeing the venture for Bertelsmann, said. "We will try to be the best on line."
And, indeed, Bertelsmann's announcement was chilling to the American Booksellers Association, the national trade group that is dominated by independent booksellers who have been buffeted by superstore expansion.
"This new venture from Bertelsmann is a tremendous, regressive step," said Avin Mark Domnitz, the organization's new executive director, who warned in a brief one-paragraph statement that the move could have "significant negative consequences."
Some technology analysts expressed reservations about Bertelsmann's late entry into electronic commerce, pointing out that even a successful bookseller like Borders has repeatedly delayed the opening of its electronic bookstore.
"They're going to have to scrap for market share," Joe Sawyer, an analyst for Forrester Research, a technology and market research firm, said.
Chris MacAskill, who founded Computer Literacy in his California garage and built the company into an electronic bookstore with more than $20 million in sales, said it is difficult for a corporation to
move nimbly on line.
"I'm generally a little bit skeptical about people thinking that it is easy getting into the marketplace," MacAskill said. "Most often, the successful Web sites were built by new people who started in this space to be Internet sellers. It didn't come from established players."
The specific look and feel of Bertelsmann's on-line venture is still evolving. Even the name, Books Online, is cautiously labeled a working title. Austin, who heads a group of 25 American employees hired in the last three months for the project, said that Bertelsmann would be looking for inspiration from the "best of the breed competition, like Amazon," which offers descriptive information, summaries and reviews of individual titles.
Last month, Bertelsmann opened an on-line bookstore based in Germany called Boulevard Online, which includes common features of Amazon.com like best-seller lists, live chats, reviews and recommendations. That site allows users to search a catalogue of 290,000 books.
But Austin said he could not give an estimate for the number of titles that will be offered for sale globally on Books Online -- a figure that has led to disputes between Barnes & Noble and Amazon.com about which has bragging rights to the claim of largest bookstore. Amazon.com claims an inventory of 2.5 million titles, although many of the books are not physically available in a warehouse. Barnes & Noble stocks more than 350,000 titles in its distribution center, which it claims is the largest standing inventory of any bookseller on line.
"I can tell you," Austin said, "that breadth and depth of catalogue is one of the ways we're going to differentiate ourselves."
.........sounds like one hell of a competitor to be breathing down AMZN's back, no?..........;^) |
