Techcrunch, "Amazon Strengthens Its Digital Hand With $300 Million Purchase of Audible", January 31st.
"Amazon is betting big on digital media. This morning it announced the $300 million acquisition of Audible. (the leading provider of audio books in digital form, with a library of 80,000 titles). As Amazon begins to generate a greater share of its revenues from digital media, owning a digital publisher will help its margins. It should be able to offer audiobooks at a lower cost, which in turn will help grow that segment of its sales.
There is no doubt that as media becomes more digital, Amazon sees it as critical for its future. Media accounts for 59 percent of Amazon’s sales, most of that still being physical books , CDs, and DVDs. But towards the end of yesterday’s earnings call, Amazon CEO Jeff Bezos hinted at the growing importance of digital media for Amazon:
When media was largely physical, it made sense to buy it in the physical world. But as media becomes digital it does not make so much sense to buy them in the physical world. The bulk of the sales now are in the physical world. So our relative advantage over time should improve."
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