Darkness in the Amazon Jungle

For a long time, Amazon.com had us in the palm of its hand. From the privacy of our Web browsers, we could buy any book on earth for less money than we would spend at a local, tax-charging bookstore. The whole place seemed up-front and trustworthy. Amazon was the Big Warm Consumer Fuzzy.

The first time I noticed weird things going on at Amazon was a couple of years ago, when I ran into a fellow book author. "Have you been watching my new book?" she asked breathlessly. "Don't you mean reading your new book?" I asked. "No, no -- watching it. On Amazon. I hit 359 last week!"

She went on to explain how each book's Amazon page shows its sales rank. Hour by hour, you can see how a book is selling, relative to the other 5 million books in Amazon's catalog. (I remember thinking: "She sits there all day, clicking on the Reload button over and over again, gloating over every little uptick in her book's rank? That is pathetic!" Two hours later, I was doing the same thing.)

The thing is, nobody understands how Amazon's sales-rank computations work, and the company isn't telling. It's easy to fool their system; if six friends order your book simultaneously at 5:26 on Thursday afternoon, then, by golly, you'll see it shoot into the top 50 (for a few enchanted minutes, anyway).

One of my books hums along in the 1,500 range during evenings and weekdays, but it tanks to 80,000 or so on weekends. What's that about? I mean, if the answer is "People don't buy books on the weekend," then all books should tank on the weekend, and their relative rankings should stay the same. Furthermore, it's a little odd that the sales-rank numbers don't correspond to Amazon's own "most popular" sort order, which appears when you're viewing the results of a search.

Glowing Praise

OK, so maybe those numbers are for entertainment purposes only. But what about those reviews that ordinary readers are allowed to post? This Amazon feature, too, holds a grisly fascination for those of us in the book-creation business. It takes a lot of chutzpah for an online store to post negative reviews of the very products it sells. But the funny thing is, Amazon's editors don't post every negative review, as those of us on an authors' mailing list have discovered by comparing notes; the overwhelming majority of books appear with mostly positive reviews. To paraphrase Garrison Keillor, Amazon is a place where every book is above average.

But I really began to wonder about Amazon in 1999, when the New York Times reported that secret promotional fees from publishers, not the independent judgment of editors, determined Amazon's "Editor's Picks."

Amazon responded quickly; it now tells which books are backed by paid placements.

Slippery Prices

Last September, Computerworld magazine unearthed another slippery tactic: Amazon charges different prices - varying by as much as $10 - to different people, depending on "which browser was being used, whether a consumer was a repeat or first-time customer, and which Internet service provider a customer was using." The Men in Black DVD, for example, cost the reporter $2 more when she used Netscape Navigator than when she tried Microsoft Internet Explorer.

Economists call this game "yield management" - the science of playing with prices to eke out the most profit, even though two consumers might pay wildly different prices. Airlines and hotels practice yield management all the time. All that's new is that a company that sells things, instead of services, has joined the party. This practice would never work in a local store, but Amazon can get away with it - after all, from your Web browser, you can't see what price anyone else is paying.

Amazon's pricing games have grown only more complex since then. In August, on all books under $30, the company cut its usual discount of 20 percent in half. Add in the $4.50 single-book shipping charge, and you can see how Amazon wound up quietly dismantling one of the pillars of its image: that it offers lower prices than the local bookstore.

In November, shortly after the pricing switch became public, Amazon restored the 20-percent discounts. But that may change again, and the damage has been done; Amazon is no longer Old Faithful. You may have a different shopping experience each time you visit.

Do the Right Thing

It's certainly Amazon's right to fiddle with its business model; the company has done nothing illegal (although some of its experiments have their seamy side). But we, the book-buying public who loved the original bookstore, helped make it the company's only profitable division. By constantly tweaking the formula, Amazon appears to be trying to make us subsidize the struggling departments - the ones that sell cars, patio furniture, and shaving cream. Let's just hope the company's tinkering doesn't squeeze the appeal right out of what used to be not only the "world's largest bookstore" but also one of the best.

DAVID POGUE ( www.davidpogue.com ) is the author of iMovie 2: The Missing Manual (O'Reilly/Pogue Press, 2001).

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