Target jumps into book price war started by Wal-Mart, Amazon

What started as a book price skirmish between Wal-Mart and Amazon.com is showing signs of becoming a much broader holiday battle. Today retail giant Target announced it is matching Wal-Mart's online price of $8.99 for top selling, soon-to-be-released titles, including "Under the Dome" by Stephen King and "Breathless" by Dean Koontz.

Wal-Mart and Amazon engaged in a tit-for-tat price war last week that resulted in heavy discounts on hot-selling preorder books. When the dust settled, Walmart.com was offering the books for $8.99 with free shipping; Amazon had the same books for $9. The price cutting — which made some books cheaper than digital new release titles on Kindle — has sent waves through the publishing industry, which fears that the discounts may set a new (low) standard in consumers' minds.

Like Wal-Mart, Target is seeking to boost its ecommerce business and faces big competition from Amazon, which has expanded far beyond books into all kinds of merchandise. Amazon did more than $19 billion in sales last year. Internet Retailer estimates Wal-Mart did $1.7 billion in online sales and Target did $1.2 billion in online sales in 2008 (both Wal-Mart and Target declined to break out ecommerce revenue). Wal-Mart reported $401 billion in overall sales for the fiscal year ended Jan. 31, so online would seem to represent a relatively small slice of revenue for the big-box chain.

Interestingly, Target, which for years has used Amazon to run its ecommerce platform, announced in August that it would take back control of its online sales operation starting in 2011.

For now, Target's $8.99 online offer on hardcover books is limited to 7 titles, though spokeswoman Kelly Basgen said the company "will be adding a few others over the next several days."

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About Eric Engleman

ERIC ENGLEMAN is senior technology staff writer for TechFlash and the Puget Sound Business Journal, covering online retail giant Amazon.com. Engleman tracks Amazon's increasingly complex business, spanning ecommerce, Kindle, cloud computing, and more. He's been covering technology and other industries for the Business Journal since 2003.

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