Online book seller Amazon.com - one of the few success stories in electronic commerce to date - is heading for the stock market as its rival retail chains make their moves into cyberspace.
Amazon.com has registered with the US Securities and Exchange Commission to issue an initial 2.5 million shares of common stock, in a bid to raise almost $34 million to fund expansion in the face of increased competition from traditional book stores.
The online retailer - which opened for business in 1995 - announced its plans less than 24 hours before the biggest US book chain, Barnes & Noble, set up its own electronic marketplace on America Online. Another major US outlet, Borders, also plans to set up a Web-based operation this year.
Online book selling is one of the few areas of electronic commerce that can genuinely claim to have been successful. US retail trade figures for 1996 report that $38.3 million of a total $10 billion of book purchases were completed online - not a lot in absolute terms, but growth in the sector is high with the 1996 total up from $11.4 million in the previous year.
Amazon.com still reports losses, but for the quarter ended 31 December, it reported sales of $8.5 million, double the previous quarter's figure. By the end of last year, the company was claiming 50,000 hits a day on its Web site.
But to date the company has had the online book market largely to itself. The imminent arrival of US and European competition with stronger consumer brand recognition is likely to spark a price war in which the pioneer could find itself outflanked.
Barnes & Noble, one of the best recognised brands in the US, will continue its policy of discounting popular titles in the online operation. Steve Riggio, the chain's chief executive, commented: "We think this is going to be a very big and profitable business."
Officially, Amazon.com maintains that it is not worried. Jeff Bezos, Amazon.com?s chief executive, insisted: "If we made our plans based on what our competitors do, we might not do anything."
But the service chose last week to announce that it intends to double the size of the its online catalogue - bringing it over the 2.5 million titles mark - and offer discounts of up to 40 per cent on some books in order to protect its market share.
Its status as an almost entirely ?virtual? enterprise has led some Wall Street analysts to predict that Amazon.com might be able to hold its own against a retail Goliath like Barnes & Noble, which has to balance the needs of its bricks and mortar and its online operations.
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