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Amazon in Solid Growth Trend With E-Book Business

May 27, 2011 2:44 PM ETAMZN
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by Tony Daltorio, contributing SmartStops.net writer

Amazon says it is selling more e-books for its Kindle electronic reading device than paperback and hardback editions combined.

If you would have told any book lover a few years ago that electronic books were poised to surge in popularity and overtake traditional books, you would have been scoffed at and drawn more than a few stares.But here we are a few years later. The Association of American Publishers recently reported that US e-book revenues had grown 146 percent in March over the same month a year ago.Figures for March showed e-book revenues of $69 million. This trailed only adult paperbacks, which were down 8 percent at $116 million, and adult hardbacks, up 6 percent at $96.6 million.


So it should come as no great surprise to investors that Amazon.com ( AMZN ) is at the forefront of the trend toward e-books. The company began as an online seller of printed books in 1995 and launched the Kindle e-reader in November 2007.

Amazon’s Growth

Amazon said it is selling more e-books for its Kindle electronic reading device than paperback and hardback print editions combined. It now sells 105 electronic books for every 100 printed ones. Amazon’s founder and CEO Jeff Bezos commented, “We had high hopes that this would happen eventually, but we never imagined it would happen this quickly.”

This is a trend which has been in place for roughly the last year now. Sales of e-books surpassed hardcover titles in July 2010 and overtook paperbacks six months later. And now its bested both categories combined!

A real positive is the fact that Amazon stated that this trend helped its book business do its strongest growth in more than a decade.

Amazon only released unit sales data rather than comparable revenue figures, and Kindle editions typically sell for lower prices than print titles.

However, the data did suggest that Amazon might be extending its leading market share in e-books. This follows the release six weeks ago of a cut-price Kindle at $114 for US customers willing to accept sponsored screen savers and other advertising.

Publishers, who gathered this week at the annual Book Expo America in New York, think that this trend toward e-books will continue. They believe Amazon and other e-book sellers are likely to benefit from the trouble afflicting Borders and other brick-and-mortar book sellers. Borders filed for Chapter 11 bankruptcy protection in February.

If you decide to make an investment in Amazon, be sure you have sufficiently evaluated the risk for your investment. Even though Amazon looks to be in a solid growth trend with its e-books business, it’s important to maintain an intelligent risk strategy to earn higher returns.

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