Macmillan still talking with Amazon, deal may come

By IBTimes Staff Reporter | February 04 2010 7:16 PM

The chief executive of book publisher Macmillan said on Thursday his company is still in talks with online retailer Amazon.com Inc, despite the apparent settlement last weekend of a dispute over the price of electronic books.

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Over the weekend, Amazon caved in to pressure from Macmillan, which wanted to charge $12.99 to $14.99 for most of its books sold at the bookstore of Amazon's Kindle electronic reader. Amazon currently charges $9.99 for the e-book version of most new releases and bestsellers.

Macmillan Chief Executive John Sargent's post gave no hint of what the terms of a new deal with Amazon could be.

But he said: Macmillan and Amazon as corporations had our differences that needed to be resolved.

In the post on Macmillan's website, Sargent said both companies had been in discussions since the weekend and praised Amazon for working very, very hard and always in good faith with Macmillan.

I cannot tell you when we will resume business as usual with Amazon, Sargent wrote. You can tell by the tone of this letter though that I feel the time is getting near to hand.

An Amazon spokesman did not immediately return a request for comment.

Amazon temporarily removed all titles published by Macmillan, whose imprints include Farrar, Straus and Giroux, and Henry Holt and Co, from its website last weekend.

The online retailer has come under fire from a number publishers for the low prices it charges for e-books to spur demand for the Kindle, hoping to fend off new rivals such as Apple Inc that are set to join the e-books fray with their own devices.

Barclay Capital analyst Douglas Anmuth wrote in a note on Thursday he expects market share for the Kindle to decline to 45 percent in 2011 from 64 percent now, given more competition from the Apple iPad and other readers.

The emergence of a (potentially) strong distribution alternative in the form of Apple's iPad has given publishers the much-needed leverage to demand a change in the existing book model, Anmuth wrote.

News Corp Chief Rupert Murdoch, who oversees a media empire that includes HarperCollins books, criticized Amazon's model on Tuesday and said Apple's deal with HarperCollins allowed for a variety of slightly higher prices.

(Reporting by Phil Wahba in New York and Alexandria Sage in San Francisco; editing by Andre Grenon)