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Friday, October 16, 2009

Amazon, Wal-Mart Enter Book Price War

FOXBusiness

There's a literary war going on, this time it's occurring literally on the battlefield of the Internet.

Retail giants Wal-Mart (WMT) and Amazon.com (AMZN) are engaged in a book price war for some of the season's hottest titles.

Wal-Mart announced on Thursday that it would sell 10 of this season's most highly-anticipated authors, including the latest work by best-selling author Stephen King and former Vice Presidential Candidate Sarah Palin, for $10 each - undercutting Amazon's prices.

In response, Amazon said it would match Wal-Mart prices, forcing the big-box retailer to cut its prices on the books to $9.

The price war sets the stage for what is expected to be a very competitive retail holiday season with cash-strapped consumers looking for deals wherever they can find it.

Wal-Mart is also trying to use its massive influence to make itself the dominant online discount retailer.

"If there is going to be a 'Wal-Mart of the Web,' it is going to be Walmart.com," said Walmart.com CEO Raul Vazquez in an interview with The Wall Street Journal. "Our goal is to be the biggest and most visited retail Web site."

The original Wal-Mart $10 price tag on books was created to compete partially with Amazon.com charge of $9.99 for its Kindle best-sellers.

Wal-Mart is most likely losing money on the venture, the Journal reported, but may be using the book promotion as a way to build brand and create a "loss leader" to Wal-Mart.com to get more customers to the site.

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