Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Amazon.com, Inc. (AMZN) -- Ignore unavailable to you. Want to Upgrade?

To: JBL who wrote (25334)	11/10/1998 7:28:00 AM
From: Glenn D. Rudolph	Read Replies (1) \| Respond to of 164684

WASHINGTON, D.C., U.S.A., 1998 NOV 9 (NB) -- By Robert MacMillan, Newsbytes. Riffing yet again on the argument over who is the earth's biggest bookstore, Amazon.com Inc. [NASDAQ:AMZN] and Barnes & Noble Inc. [NYSE:BKS] have entered into verbal skirmishes regarding Barnes & Noble's merger with the Ingram Book Group distribution company. The last time this issue arose, each company boasted that they were the bigger store. Now that federal regulators are looking into the legality of the Barnes & Noble-Ingram merger, each company is making the claim that they are the smaller of the two. Amazon.com has expressed concerns about the merger between its rival online bookstore, whose roots lie in the physical retail arena, and the Ingram Book Group, a massive subsidiary of the even larger Ingram Industries Inc. The acquisition is worth $200 million in cash and $400 million in stock. Amazon.com is an Ingram Book Group customer, as is online book- selling latecomer Borders Books [NYSE:BGP]. Amazon.com, Borders and officials from the Federal Trade Commission (FTC) and Department of Justice are wondering what the bottom-line effects will be of Amazon.com's and Border's distribution company being bought by their main rival. Amazon.com President Jeff Bezos took the posture of the young, Internet upstart, saying that "Goliath is always in range of a good slingshot," but Barnes & Noble subsidiary Barnesandnoble.com responded with an accusation that Amazon.com in fact is much larger than it suggests, and is by no means a tiny company anymore. "Well, Mr. Bezos, what with a market capitalization of some $6 billion and more than 4 million customers, we suppose you know a Goliath when you see one," Barnesandnoble.com said in a statement. Attorney Robert Hauberg, a former assistant US attorney and senior counsel to the Justice Department's Antitrust Division, told Newsbytes that Barnes & Noble and Ingram Book Group in this case will file a brief with the government under the terms of the Hart-Scott-Rodino Antitrust Improvements Act that would detail how the merger would not chill competition. "The FTC will have up to 45 days for the initial review," said Hauberg, currently the head of the antitrust, white collar crime and compliance practice group at law firm Baker Donelson Bearman & Caldwell. "The FTC procedurally can extend that period and issue second requests... and interviews directly (to) the parties." Hauberg said it is unclear how the government will react to the terms of this merger, but if it raises red flags over particular terms that may chill competition in the bookselling market, it may attempt to arrive at a consent decree instead of canning the deal outright. A precedent set for this idea would be the consent decree issued by the government after Tele-Communications Inc. [NASDAQ:TCOMA] acquired Liberty Media. The government maintained in legal action against TCI that the Liberty acquisition would make Liberty-produced content more difficult to obtain for TCI rivals. A consent decree to prevent that very problem was instituted, however, and the merger went ahead as scheduled. Hauberg added, however, that Amazon.com and the American Booksellers Association will continue to voice their negative opinions about the merger. "Amazon.com... would probably face enhanced competition, and in their view, unfair competition, because of the distributor from whom they get most of their product," Hauberg said. Amazon.com officials did not return telephone calls before deadline. The Booksellers Association claims the merger will hurt independent bookstores, although Barnes & Noble responds that the opposite will occur because independent bookstores are some of Ingram's more important customers. Hauberg said the possibility of a situation described by FTC Chairman Robert Pitofsky exists in which once Ingram and Barnes & Noble merge, Amazon.com effectively would be forced into entering the distribution business as well. This would require further entrants into the online bookselling market to enter the distribution market as well in order to survive, which US antitrust law refers to as an illegal "barrier to entry." Barnes & Noble in a statement said that the Ingram acquisition does not harm the spirit of competition, and in fact is more beneficial for customers. "We expect to dramatically improve the services Ingram will offer to all its customers: beginning with a wider selection of titles," the company said in a statement. Ingram Book Group subsidiaries include Retailer Services Inc., Ingram Periodicals Inc., Spring Arbor Distributors Inc., Publisher Resources Inc., Ingram International Inc., Tennessee Book Co., Lightning Print Inc. and Ingram Library Services Inc. Reported by Newsbytes News Network, newsbytes.com .