Kindle, A New Way To Read

Monday, March 24, 2008

Amazon.com buys Audible; March into digital content distribution continues

Amazon.com’s march into digital distribution of content continues–this time with plans to acquire Audible for $300 million.

In a statement on Thursday, Amazon said it will acquire Audible, which provides digital spoken word content–audio versions of books, newspapers and other programming. Audible offers more than 80,000 programs.

If you couple Audible with Amazon’s march into DRM-free music distribution the e-commerce giant is building quite a content arsenal. Obviously, Amazon’s Kindle (all resources) is going to be one key way this content is distributed. When Amazon reported earnings last night (Techmeme roundup) it noted that it was scrambling to keep up with Kindle demand.

Amazon CEO Jeff Bezos said on the company’s earnings conference call:

Kindle is, in terms of demand, is outpacing our expectations, which is certainly something that we are very grateful for. It’s also on the manufacturing side causing us to scramble. We’re working very hard to increase the number of units that we can build and supply per week, so that we can get back — our goal is to get into a situation as quickly as we can where when you order a Kindle, we ship it immediately. That’s the standard we want to hold ourselves to and we are working very hard to get there. We are super-excited by the very strong demand.
If successful, Amazon could have a vertically integrated lock on digital content much like Apple. Amazon isn’t there yet, but the strategy does make you go hmm.

As for the nuts and bolts of the Audible purchase, Amazon is paying $11.50 a share for Audible. The deal is expected to close in the second quarter.