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Ebooks outsell paperbacks

31 January 2011

Amazon has just announced that ebooks for its Kindle are now outselling paperbacks.

Jeff Bezos was understandably jubilant: "We had our first $10 billion quarter, and after selling millions of third-generation Kindles with the new Pearl e-ink display during the quarter, Kindle books have now overtaken paperback books as the most popular format on Last July we announced that Kindle books had passed hardcovers and predicted that Kindle would surpass paperbacks in the second quarter of this year, so this milestone has come even sooner than we expected - and it's on top of continued growth in paperback sales."

Everything is not plain sailing for Amazon though. Sales at $12.95bn (£8.16bn) are up 36% from a year ago, but operating income has declined by £2m (£1.260) to $474m (£298.854m). Wall Street was not happy and shares were marked down sharply by 7.5%, as the market reacted to Amazon's high-wire act with scepticism.

The company, which began life as a bookseller in 1995, is aggressively expanding the range of products it sells, as well as its web services business, which rents computing capacity. They are planning to add another seven fulfilment centres, which handle distribution for the company as well as housing its web services businesses. In its international segment, which includes the UK as well as Germany, Japan, France, China and Italy, sales were up an astounding 26% to $5.74bn (£3.62bn).

For bricks and mortar booksellers, the news from Amazon was almost totally bad. The rapid increase in ebook sales as the Kindle gains market share is due to the ease with which people can download ebooks on to their devices. In the US a large proportion of paperback buyers are opting for ebooks instead. But it also shows that Amazon are getting a much bigger proportion of the e-book market than they have of the paperback market.

The implication for other booksellers is clear as sales shift to the ebook, to the Kindle and therefore to Amazon. Whether or not Amazon is pleasing the analysts, the implications are considerable. Given the current rate of growth of online sales, the whole structure of the book trade will change, as people shift to ebooks and download them online or straight to their reading device.