Walmart vs. Amazon, it's war!

Walmart fired a deafening shot at Thursday, announcing plans to sell 10 hot new books for just $10 at its Web site, Yep, that's right, hardcover books from bestselling authors like Dean Koontz and James Patterson for just $10.

And here's the fun part: When Amazon said it was matching those prices, Walmart dropped its prices again, to $9 per book. It's a price war on the tallest order. (You can already preorder books).

"If there is going to be a 'Wal-Mart of the Web', it is going to be," said CEO Raul Vazquez in an interview with the Wall Street Journal (subscription required). "Our goal is to be the biggest and most visited retail Web site."
I'm convinced a lot more of us will be shopping online this holiday season, and saving money is only one reason why. More and more, we turn to the internet to research products, read reviews and compare prices. Driving traffic to with some eye-popping deals will logically lead to higher click through rates. Meaning, customers will buy the book and then some.

Convenience and low prices online, that's been one of Amazon's strengths since its inception. Competing more directly with Walmart on this was only a matter of time. Shortly after the book announcement, Amazon unveiled plans to offer same day delivery in seven cities including New York, Seattle and Las Vegas.

Walmart doesn't always win these battles. In 2003 it launched a DVD rental service to counter Netflix but shut it down less than two years later, directing subscribers to the very company it hoped to beat: Netflix. It also backed off selling movie downloads after less than a year of trying.

Walmart does a lot of things well, but not all. Trying to capture market share from a competitor is good business and par for the course. But usually that happens when a competitor is weak or a product category is undergoing some change.

Consolidated sales were up 14% for Amazon's last quarter ended in June, although I think there's some seismic activity going on in the category. Electronic readers are starting to move beyond novelties and become a genuinely viable business. Downloadable versions of books, both new releases and the classics, are causing publishing companies to rethink business models and digital rights are now an issue among authors.

It's a lot like the advent of digital music files.

Amazon has an early start in this. Its Kindle is the leading reader, and while it's an amazing device, it hasn't had much competition. That's about to change. Sony has a new Reader, Google is getting in the game and Barnes & Noble has one on deck for the holidays.,feedConfig,entry&id=473989&pid=473988&uts=1255718507
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