Amazon is moving into the book publishing industry, hiring former Time Warner Publishing CEO Larry Kirshbaum to head its new venture.
Bloomberg Businessweek reporter Brad Stone says the publishing industry is running scared.
"I think they're terrified," Stone told Here & Now's Robin Young. "Amazon is their biggest customer... and they've been at Amazon's mercy for quite some time," said Stone.
Stone's cover story on Amazon recounts the bad blood between Amazon and the big six publishers that goes back to the launch of the Kindle. At that point, Amazon founder Jeff Bezos announced that New York Times bestsellers would go for $9.99 on the Kindle. The news shocked the publishers, who felt it would force all book prices down.
Meanwhile, Amazon is also eying a brick and mortar Amazon store and possibly launching a Kindle phone.
This is part of a trend in the business world where companies are creating entire ecosystems to sell their products, spurred by Apple's dominance of tablets and phones.
"You're Jeff Bezos sitting in Seattle, or Mark Zuckerberg in Menlo Park and you're seeing potentially Apple circumvent you, they're owning the next generation of devices," Stone said. "And so all these companies are just scampering to keep up."
Amazon's e-books and Apple's iTunes stores are examples of ways that industries are cutting out the middle men.
"There is one element of thought that in the age of digital there is much less room between the consumer and the creator," Stone said.
- Brad Stone, Bloomberg Businessweek
This segment aired on March 7, 2012.