Amazon to Buy Audible for $300M

Online retailer on Thursday said it has agreed to acquire audio books seller for approximately $300 million in cash and short-term investment.

The move lends added distribution and format flexibility to Seattle-based Amazon which is best known as a book seller. It also comes on the heels on a series of moves Amazon has made with the major music labels to free its music download business of copy protection restrictions.

"Amazon understands that we are moving into a world where both content and distribution are digitized," said Michael Goodman, an analyst with Yankee Group. "Although Amazon is an online vendor it still primarily sells hard-copy books, CDs, and DVDs by mail, so it has to adapt."

Two months ago Amazon launched Kindle, an electronic book that allows users to download and read digital books and newspaper articles over cellular networks. And in September 2006, Amazon also launched Unbox, a movie download service.

"Amazon is attempting to cover its bases in terms of content distribution in music, books, and movies," said Dave Card, an analyst with JupiterResearch. "Amazon understands that it is in both the retail and delivery businesses."

Earlier this week Amazon said will begin selling its digital music without digital rights management (DRM) protection, a technology overlay that limits the number or nature of the devices on which downloaded songs can be copied.

Amazon has gotten the major music labels to drop their insistence on DRM protection.

Ironically Newark, New Jersey-based Audible sells audio books, audio magazines, and radio and TV programs with DRM protection. And like the major labels, the nine-year-old firm has come under fire for its use of DRM.

The acquisition of Audible is subject to regulatory approvals, and is expected to close by the second quarter of 2008.

via Red Herring

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