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Amazon.com Yields to Macmillan Price Demands

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February 4 – February 11, 2010 Edition

Amazon.com Yields to Macmillan Price Demands

/02/02/10–Amazon.com this past weekend capitulated to Macmillan publishing company’s pressures to let the publisher set higher prices for its e-books. Amazon’s blackout of Macmillan’s book titles looks as if it has been partially, if not completely, restored. But negotiations continue this week with no further public statements.

Amazon on Saturday apparently pulled all Macmillan titles from its site to protest Macmillan’s demands for higher prices. However, on its blog Sunday, Amazon indicated it would meet Macmillan’s price demands.

Macmillan CEO John Sargent told the media Sunday that the publisher is in negotiations with Amazon in trying to resolve differences, but he declined further comment.

The New York Times dramatized the face-off on the front-page of its business section: “After a weekend of brinksmanship, Amazon.com on Sunday surrendered to a publisher and agreed to raise prices on some electronic books.”

Amazon wants to keep prices for e-books at $9.99, including bestsellers. Under Macmillan’s model, to become effective in March, e-books will be priced from $12.99 to $14.99 upon release and prices will change over time.

Amazon.com indicated over the weekend that it will yield to publishing giant’s demands and agree to sell electronic versions of its books even at prices it considers too high.

“We want you to know that ultimately, however, we will have to capitulate and accept Macmillan’s terms because Macmillan has a monopoly over their own titles, and we will want to offer them to you even at prices we believe are needlessly high for e-books,” Amazon said in a web site posting.

Amazon wants to hold down prices as competitors such as Barnes & Noble, Sony and Apple, cut into its dominant position in the marketplace.

Macmillan and other publishers have criticized Amazon for charging just $9.99 for best-selling e-books on its Kindle e-reader, saying the low prices could hurt hardcover sales.

Macmillan is one of the world’s largest English-language publishers with divisions including St. Martin’s Press, Henry Holt & Co. and Farrar, Straus & Giroux.