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March 2, 1999


By CBR Staff Writer

According to the chairman and CEO of the Penguin Group, Inc and Barnes and Noble Inc might as well not bother trying to sell books over the web – they are never going to make any money, he reckons. Speaking at a session at the Consumer Online Forum in New York yesterday, Michael Lynton said that as long as you have to ship a book and pay someone to find the book in a warehouse there’s no way you can make money. This is presumably why both companies have diversified and are now offering videos and CDs, with other product lines planned. He noted that a major publisher like Penguin, will have to change a lot of things about its physical books and the way they are promoted to survive online. For example, for a publisher with such a strong brand as Penguin, web sites are of little use. Readers don’t usually search by the publisher’s name – they use authors, subjects and titles to find what they want. Plus the company’s logo is not easily noticeable on web sites and it is used to selling books based on territorial rights – books sold in Australia are usually distributed there, whereas now they could have been sent from a warehouse in the UK. Lynton tried hard not to sound like a rabbit caught in the headlights of a web commerce juggernaut, but didn’t quite pull it off. He noted that the largest bookseller in the US just 30 years ago was Macy’s – it no longer sells books and no, Penguin has no intention of trying to sell its books online directly. Lynton believes part of the answer lies with electronic books and notes that his wife prefers it because as they are back-lit, there is no need to leave the light on at night to read. á

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