What You Need to Know About Amazon's Book-Publishing Move

John Grgurich, The Motley Fool
Updated

What's happening in the headlines can affect you as an investor. Here's what's going on, what you need to know, and what you should do.

The cold, hard facts
The Financial Times is reporting that online retailing giant Amazon.com (NAS: AMZN) has acquired 450 children's titles from Marshall Cavendish, a leading publisher of children's books.

Some context
This move is only the latest step in Amazon's efforts to gain scale in publishing and selling books, the original foundation of its business (well, the selling part, at least). But until recently, Amazon has focused on building its own publishing businesses rather than acquiring them. It has six separate imprints, publishing science fiction, thrillers, romance novels, new authors, foreign translations, and short stories.

"Amazon are taking book publishing very seriously," Faye Landes of Consumer Edge Research told the Financial Times. The Marshall Cavendish deal was "a way to give them yet more leverage with, and power over, traditional publishers."

What you need to know
From its humble beginnings as an online book retailer, Amazon.com has moved decisively into a myriad of previously untapped retail spaces, rendering traditional brick-and-mortar operations such as Barnes & Noble (NYS: BKS) close to irrelevant.

And with its Amazon Prime service, the company hopes to relegate cutting-edge online service providers such as Netflix (NAS: NFLX) to the dustbin of history. As Google and Apple are also in the online, cloud-based services space, let's figure them as being in Amazon's sights as well.

For the first time in the company's history, Amazon is selling more e-books than print books. Count on the company to use the Marshall Cavendish books to enhance the appeal of the Kindle Fire, a color tablet that it launched last month to compete with Apple's iPad. Picture books for children have not worked well on black-and-white e-readers. This could change all that.

Amazon.com has never been content to rest on its laurels. Thank goodness for investors, it still isn't.

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At the time thisarticle was published Fool contributorJohn Grgurichloves the smell of newsprint in the morning, but he owns no shares of any of the companies mentioned above. The Motley Fool owns shares of Google and Apple.Motley Fool newsletter serviceshave recommended buying shares of Apple, Google, Amazon.com, and Netflix and creating a bull call spread position in Apple. Try any of our Foolish newsletter servicesfree for 30 days. We Fools don't all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has a scintillatingdisclosure policy.

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