New Entry in E-Books Is a Paper Tiger

Suppose there are two rival companies — let’s call them A and B. Each wants to dominate the blossoming world of electronic books.

Company A (that’s A as in “Amazon”) began life selling physical books online. Its reading gadget, the Kindle, stores hundreds of books in a plastic slab that weighs only 10 ounces. To accompany the Kindle, Company A built an enormous electronic-book store, filled with 345,000 books that can be downloaded to the Kindle in 30 seconds (each).

Company B (that’s B as in “Barnes & Noble”) waited patiently. “Let’s let A get all the arrows in its back,” it said.