Waterstone's calls time on Amazon love-in

Bookseller Waterstone's has won approval from observers for ending its arrangement with ecommerce giant Amazon.

The HMV-owned book chain has used Amazon as its online channel since 2001, which meant it was effectively redirecting potential customers to Amazon. It has now decided to go its own way after the online share of the bookselling market exceeded its expectations.

A HMV Group spokesman said on Wednesday: "The market was very undeveloped [five years ago].

"Internet book retailing was only five per cent of total book sales in the UK, and it looked at that time as though the market would probably grow to 10 per cent in total, and we took the view at that time that it was a subset more appropriate for a national monopoly such as Amazon.

"It's now around 11 to 12 per cent - a level where we should take control ourselves of our own destiny online."

The spokesman denied regretting the Amazon association, saying it was the right decision at the time. He admitted the move would put Waterstone's in direct competition with its erstwhile partner but expressed confidence the chain would be able to effectively transfer its reputation as a specialist bookseller online.

He would not give details of the upcoming Waterstone's site, other than to say "some of the functionality will be based around creating a genuinely new community for booklovers and readers".

Joel Rickett of industry publication The Bookseller called the move "long-anticipated" and "absolutely logical".

Rickett said on Wednesday: "In terms of share of the book market, Amazon has grown spectacularly in the last few years and a lot of that's come from the high street, and shops like Waterstone's.

"Waterstone's earned a very small commission from Amazon on the site. It really was an Amazon brand. Waterstone's now needs to have a distinctive presence online."

Although it will be tough for Waterstone's to make inroads into Amazon's market share, Rickett said there will be "more space" in the market as people grow comfortable with online buying.

Amazon's diversification into a multitude of other services would also mean "there probably is room for the leading specialist book brand to develop a site that's completely devoted to books," he said.

David Meyer writes for ZDNet UK