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Should Amazon Have Caved to Macmillan?

Did Amazon make the right move in capitulating to Macmillan's higher-priced books -- and will that decision ultimately hurt the Kindle? Take our poll and see what TheStreet is saying.



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giving in to Macmillan publishing can be viewed as both a positive and negative for the company.

Last week, the e-retailer removed some of Macmillan's titles after the publisher said it planned on upping prices for e-books.

Over the weekend, though, Amazon had a change of heart, and announced it would accept Macmillan's decision.

"We have expressed our strong disagreement and the seriousness of our disagreement by temporarily ceasing the sale of all Macmillan titles," Amazon said, in a statement. "We want you to know that ultimately, however, we will have to capitulate and accept Macmillan's terms because Macmillan has a monopoly over their own titles, and we will want to offer them to you even at prices we believe are needlessly high for e-books."

Starting in March, the publisher will set the consumer price for each book, and Amazon will take a 30% commission. Most new releases will cost between $12.99 and $14.99.

Amazon has traditionally set e-book prices at a default $9.99 for new releases and best sellers.

This move comes as the competition between e-readers intensifies. The unveiling of


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iPad last week raised concerns among investors that the device could steal market share away from Amazon's Kindle with its iBook store.

Higher e-book prices, however, could also lead to higher margins for Amazon.

"While the irony is palpable that increasing competition in the e-book market might actually push prices higher (back to the physical format levels), we note that Amazon could turn e-books from loss leaders to profit generators," analyst Colin Sebastian of Lazard Capital Markets wrote in a note.

But what do you think? Did Amazon make the right decision when it capitulated to Macmillan's higher book prices? Take our poll below to learn the what


has to say.

-- Reported by Jeanine Poggi in New York.

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