Amazon, Audible and Apple

Amazon is buying Audible, maker of audio books, for $300 million. Chump change for an e-commerce transaction, but of course I’d love to have founders shares on such a deal.

I happened to see the story by Brad Stone in the dead tree edition of the NYT, and he raised some interesting points.

Stone noted that Audible was a dot-com (1999 IPO) that went dot-bomb with everyone else. Reading between the lines, the investments by Random House, Bertelsmann and Amazon in 2000 kept the company alive until its market ripened at it was swooped up by Amazon.

IMHO, like so many other companies spawned by the technology push optimism of the 1990s, this was a company years before its time (like eBooks). Its business model didn’t make sense until people had iPods (instead of laptops) to listen to their Alive to be bought by Amazon.

The other point that Stone (and I’m sure others) makes is that Audible has succeeded through distribution by the iTunes store to all those iPods. No word as to how Apple will feel about the deal, but I’m guessing Amazon is hoping Apple will say “bye” and it can try to switch all those Audible customers over to the Amazon MP3 store. The other possible outcome of a Audible-Apple divorce is that Apple makes some other company the next Audible.