After having what seems like a decent quarter, Amazon announced today that it has bought audiobook giant Audible for approximately $300 million, or at a price of $11.50 per share. Although two companies have long been in competition with each other, it’s clear the New Jersey-based 200 employee company founded in the dotcom-rush has had the market lead in terms of format penetration and sales.
To Amazon, this will mean a huge bump in assets and presence in digital media. With the help of Amazon, Audible should now be able to offer even lower prices and bring their inventory to a broader audience. In terms of revenues, Amazon adds about $80 million of annual revenue to its income statement through Audible. And now with the help of each other, this number is likely to grow — there are a number of opportunities for both companies to leverage given their position.
Personally, I’m a loyal Audible user and, even though through DRM, find their service to be one of the best server-to-device experiences out there. In all it takes about a minute to make your purchase, around five for the file to download, and a second for it to go into your iTunes library once it has. While I haven’t tried Amazon’s own audiobook service, I can’t imagine it is as good as Audible’s — when it comes to spoken word entertainment, they’ve done nothing but nail the market.
The acquisition seems like another step in Amazon’s strategy to be a viable company in the day and age of new media and Web 2.0. As they revealed through yesterdays’ earnings report, there’s plenty of value in their non-core strategies — like their web services and book-reading device Kindle. While e-commerce is undoubtedly where they make their bread, there’s no saying as to where they’ll get tomorrow’s cake.
