Wal-Mart, Amazon Battle: Firing Line

NEW YORK (TheStreet) -- On March 9, 1862, at Hampton Roads, Va., the future of naval warfare was changed forever.

For the first time, two ironclad warships faced off in an epic battle. The CSS Virginia (USS Merrimack) battled the USS Monitor for hours, as their respective flotillas watched. The ships traded cannon fire and each ship landed a couple of hits, but also sustained some damage. Unable to knock each other out, both retired from the engagement, believing the other retired first. Both sides claimed victory.

Now 147 years later, we're about to witness a similar duel between two business ironclads, and it remains to be seen who will retire first, if at all. If I were a betting man, and I am, I would bet we'll see the same result.

Wal-Mart (WMT Quote), the behemoth brick-and-mortar retailer, launched the first broadside in a modern day battle against online heavyweight Amazon (AMZN Quote). Last Thursday Wal-Mart fired the first shot by announcing it would sell 10 of the hottest new books online for $10. Amazon returned the broadside by lowering its price for the books to $9, which Wal-Mart immediately matched. The last round of the initial volley had Wal-Mart taking a penny off, reducing the price to $8.99.

On Monday, Target (TGT Quote) joined the battle and matched Wal-Mart, while offering free shipping.

This battle is occurring at a crucial time. Retailers are consulting their crystal balls to predict how bad (or good) the upcoming holiday season will be, and this battle clouds their view.