In its second-largest acquisition, Amazon buys the company for $970 million.
After a dispute over pricing, the publisher’s adds 17,000 titles to Apple’s iBookstore.
Book publisher Random House announced yesterday that it would go along with Apple Inc.’s pricing model to sell its books through Apple’s e-book store. The move adds more than 17,000 Random House titles to the iBookstore, which sells e-books that can be read on several Apple devices, including the iPad tablet. Apple CEO Steve Jobs announced the new availability of Random House’s titles during a news conference today that also introduced a new version of the iPad. Jobs said that, with the addition of Random House, the iBookstore now features titles from more than 2,500 publishers.
Apple’s pricing structure requires publishers to set the prices for their e-books and then Apple takes 30% of each sale. Random House had preferred a pricing structure that was more like the wholesale pricing used for the sale of printed books. Publishers typically sell printed volumes to retailers at a 40-50% discount off the book’s list price, and each retailer decides what to charge its customers.
Random House was the last of the major U.S. publishing houses to agree to Apple’s pricing model for digital books. The agreement comes as the Apple iPad is gaining ground as an e-reader against Amazon’s market-leading Kindle device, according to ChangeWave Research. Apple’s iPad doubled its e-book market share between August and November of last year, and controls 32% of the market, the research firm says. Amazon’s Kindle device slipped from 62% to 47% during the same period. Amazon is the No. 1-ranked e-retailer in Internet Retailer’s Top 500 Guide; Apple is No. 4. Forrester Research predicts the e-book market will total almost $3 billion by 2015.