Filed under: Other issues, Products and services, Industry, Consumer experience, Rants and raves, Competitive strategy, Amazon.com (AMZN), Marketing and advertising, Books

In the last few days, bookselling giant Amazon.com Inc (NASDAQ: AMZN) has made a few more enemies in the publishing world by forcing the little-known group of print-on-demand (POD) publishers to either submit to using its POD subsidiary, Booksurge, or risk being prohibited from selling on its industry-leading website. No matter the cost and complications of breaking off relationships with other vendors, reformatting books and a host of other problems, Amazon laid down the law, saying convert — and do it swiftly — or face the consequences.

What’s more disconcerting is that an official press release was made public only after smaller publishers like Angela Hoy of Booklocker.com started writing publicly about blackmail-type phone calls from Booksurge representatives. Fearful of losing their businesses literally overnight, many POD publishers such as iUniverse and Lulu have capitulated while strong willed publisher PublishAmerica refused to give in — and was quickly made an example of when Amazon disabled the purchase buttons on their book titles!

As an author selling my own critically-acclaimed POD book An American Hedge Fund on Amazon, outrage has compelled me to write about how unethical and more importantly, monopolistic this all is.

In a short-term business sense, Amazon is right to use its large size to gain marketshare for Booksurge and squeeze out the smaller players, but the problem is this goes against what made it great — offering the lowest prices and widest selection, basically like an online Wal-Mart Stores Inc (NYSE: WMT). To authors and publishers, Booksurge is known for its poor product quality and high cost structure, supremely inferior on both fronts to rival Lightning Source (LS) — trust me, I did the research and that’s why I selected LS — the POD subsidiary of Ingram Industries, the leading book wholesaler and the company on which Amazon has clearly declared war.

So, by making Booksurge the only POD option, relegating quality-loving publishers and authors to much smaller websites of Borders Group (NYSE: BGP) and Barnes & Noble Inc (NYSE: BKS), Amazon proves it no longer cares about its customers getting the widest selection at the cheapest prices — oh yes, even publishers that give into Amazon’s demands will be forced to raise their prices — it cares more about its own profits.

Until this latest development, I believed Amazon was the future of bookselling. It was making money, as were the publishers and customers who received the cost/quality benefits, but when a company happily alienates its suppliers whose hardships will inevitably be felt by the company’s customers, I cry foul.

Authors, readers, consumers and businesspeople unite! Sign THIS petition and let Amazon know what it is doing is wrong. That it is only a retail giant because we, the consumers, say so. We, not it, have the power here. While POD publishing is just a little niche, it’s a slippery slope; if you let Amazon get away with this, it might be your business and industry it comes after next.

Timothy Sykes writes the blog timothysykes.com, is a former hedge fund manager, star of the Television show Wall Street Warriors and author of the book, An American Hedge Fund: How I Made $2 Million as a Stock Operator & Created a Hedge Fund

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Filed under: Management, Industry, Google (GOOG), Marketing and advertising

Google Inc.’s (NASDAQ: GOOG) Chief Information Officer Douglas Merrill is reportedly leaving the company to become the president of EMI’s digital section. Google confirmed Merrill leaving the company yesterday, while EMI confirmed the rumors this day. According to Billboard, Merrill officially joins EMI on April 28 in the brand new position, but will be based at legendary Capitol Tower in Los Angeles. Much of the business for the fourth-largest record label is conducted in London, which might signal that EMI heavily courted Merrill.

At a time when the music industry is in flux, Merrill’s move from Google to EMI is inventive and should help the music company foster growth into a realm that all music companies have had trouble entering successfully: the digital world. Apart from limited success here and there, the music industry overall has not handled technology that makes many of their marketing and distributing schemes obsolete. The report that commented heavily on Merrill’s move noted how his experience at Google can help EMI form a strategy to compete on the World wide web.

For Merrill, the report comments, “the move will require either a large mental exercise or a near religious conversion.” The report also notes “it will be interesting to see what an executive from a company known for pushing the envelope on fair use can bring to an industry that has rabidly protected its copyrights.” That’s a nice sentiment, but any hopes that a swift or painless transition for EMI and Merrill seems impossible. Like the article states, “maybe he has the ability to help them use the Web to make money instead of trying to keep others from using it at EMI’s expense.”

Guy Hands, the chief at EMI, might be despised by some parties for taking a wrecking ball to expenses, but if this move does anything it should indicate that the Internet as a tool for growth is being taken seriously. At the same time, should it really take an World wide web executive to reveal that vital piece of information? Either way, since the music industry is in flux, maybe this addition can add another level of change that will excite everyone involved.

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Filed under: Internet, Google (GOOG), Marketing and advertising

Well that was fast — in August 2004 Google Inc. (NASDAQ: GOOG) went public at $80 a share and the stock climbed as high as $742 in November 2007, an 828% rise. But since then it’s lost 37% of its value and some executives have bailed. The New York Times reports that Google’s VP of Engineering, Douglas Merrill, just bolted for a position as president digital at record company, EMI.

But this isn’t the first of its executive departures. Google has also lost the following:

• In March, Sheryl Sandberg, who was VP for global sales and operations, left to become chief operating officer at Facebook
• CFO George Reyes announced last August that he would retire. At the time, Google said it hoped to find a replacement for him by the end of the year but has yet to appoint a new CFO

Meanwhile, Sys-Con reports that Google’s U.S. growth is slowing. In 2007 its click-through rate grew between 25% and 40% but in January 2008 click-through growth was flat and in February click-throughs grew a mere 3%. And it gets worse –plain old Google searches that have nothing to do with paid clicks are also down 5% or 6%. Google attributed the January slowdown to its attempts to improve the quality of clicks and tighten up on accidental clicks.

So are Google’s ideal days behind it? It depends on whether there lurks a radically new and popular service somewhere in its 83 employee-initiated projects. Meanwhile, at a Price/Earnings to Growth ratio of 1.2 — on a P/E of 33 with earnings growth of 27.5% to $22.04 in 2009 — Google stock isn’t cheap — but it’s not grossly overvalued either.

So if you think Google could make a huge unexpected splash with one of its new services, then it might not be a bad time to buy. Otherwise, take your profits. That’s what a growing number of Google executives seem to be doing.

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in Google securities.

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Filed under: Good news, Wal-Mart (WMT), Marketing and advertising

Even people like myself, who aren’t avowed Wal-Mart Stores Inc. (NYSE: WMT) haters were appalled by the company’s callousness: Deborah Shank was severely brain damaged after a crash with a truck. Her insurance, provided by Wal-Mart, paid for her medical needs, and Ms. Shank and her husband received $700,000 in a settlement from the trucking company that crashed into her. Then Wal-Mart, a $190 billion company, sued for the money to recoup the amount it spent on her medical care.

The media firestorm that ensued consisted of hundreds of articles and almost universal condemnation of Wal-Mart’s antic. When I wrote about the sad case of Deborah Shank back in December, we were inundated with comments including these:

Walmart - Definitely the definition you would find under present day Scrooge

This company just SUCKS majorly.

EVERYBODY SHOULD BOYCOTT WALMART PERMANENTLY

Now Wal-Mart has, in a a gesture of magnanimity, sent the Shank family a letter saying it will stop seeking to collect the money she won in the lawsuit.

Here’s what’s so dumb about this whole case: Wal-Mart has spent millions in current years trying to convince everyone the company isn’t evil — check out Walmartfacts.com. And then it can go and generate far more negative publicity with a story like this all in an effort to collect $700,000 — after legal fees.

It’s a good thing it finally did the right thing, but this whole episode is indicative of the company’s public relations stupidity.

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