Just checking out some of the stock prices of the big online retailers after Black Monday – the biggest online shopping day of the year.
eBay was up 3.45% in Monday trading while Amazon was up 3.0% -- both prices indicative of the bullish sentiment investors are showing on online retail companies this holiday season.
I discussed eBay in the last few blogs so let’s let Amazon take a turn. After hitting a one-year high of $101.09 in October, the stock hit the skids in November, sliding back to the low $80’s range. That number should pick up again throughout the month as shoppers fill their holiday stockings with Amazon book and CD orders, gift card purchases, and online auction items.
That said, there is an “X-factor” with Amazon that could sway its stock price in any direction. I’m talking about the company’s newly released Kindle, Amazon’s brand-new (released last week) e-book reader, otherwise known as the iPod for the best-seller set.
Kindle allows users to store electronic versions of hundreds of books, and with a good deal of flexibility, too. Readers can search, or jump to any spot in the text and even expand the type size for dark plane rides or dimly-lit bedrooms.
As many critics have already pointed out, why try to improve on traditional books in the first place? Printed books are user friendly, don’t need charging, are fairly cheap to own (especially in the secondary book market, an area which Amazon pioneered online), and if you drop them their contents don’t spill out onto the floor at Starbucks.
Maybe that explains why previous e-book reader efforts like Rocket eBook Reader. Gemstar. Everybook. SoftBook. Librius Millennium Reader have pretty much tanked. Sony’s e-reader, called the Sony Reader, is getting good user reviews but hasn’t sold many units at $350 per pop.
So where does that leave eBay and Kindle at a higher price range ($400 per unit)? It’s a fair question and one I don’t have an answer for yet. The design is being savaged online: one wag compared the thin, 10-ounce slab of white plastic, tucked into a leatherette cover to the old, clunky Commodore 64. But readability gets good reviews – the bold black ink on light paper produces no glare and you never have to turn the unit off (it only uses power when you actually turn a page).
The saving grace, and the reason I think Kindle has a shot to burn up the e-reader market and help drive the company’s stock back up to the $100 level and beyond is the, get this, free wireless Internet service that’s part of the Kindle package. The wireless feature was designed for book downloading (preferably from Amazon) but you can browse the web, check email, and even start a blog on the latest e-book you read.
Downloads are also easy - - you can get any one of 20,000 books on your Kindle within 60 seconds, and e-book costs are about half of what traditional books cost.
It’s an interesting idea from an interesting company. I’ll probably buy one myself.