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Harry Potter or Bust

Amazon.com took some ribbing from a handful of analysts who criticized the e-tailing giant's money-spending ways over the handling of the Harry Potter epic The Goblet of Fire. The theory goes, Jeff Bezos has been promising to curtail Amazon's customer acquisition "at any cost" strategy ever since Wall Street started demanding profits from profitless dot-coms. And, the company lost big bucks on this latest stunt.

I couldn't disagree more with the rebuke of the pioneering bookseller, and it's a guesstimate at best of exactly how much money has actually been lost when all factors are weighed. A couple of watershed events took place during the weekend that some pundits may have overlooked. I've simply got to start with the obvious, or not-so-obvious coup, depending on where you're sitting. Barnesandnoble.com .

Maybe this rivalry was over a long time ago. We all know the circuitous route taken by brick-and-mortar Barnes and Noble in spinning off its online sibling cost the parent company dearly. By the time baby barnesandnoble.com hit the new issues market, investors weren't willing to award plain vanilla booksellers with rich premiums. By summer of last year, Amazon.com had more in common with Wal-Mart , and the market cap to prove it.

The latest episode in the mind-share battle over books on the Web draws a clear illustration why the market thinks barnesandnoble.com is worth a paltry $200 million, about the market cap Amazon gains and loses in an average trading day.

Apparently someone neglected to send barnesandnoble.com the memo that foretold Christmas would be arriving in early-July for thousands of boys and girls, and perhaps more importantly, working Moms and Dads. Meanwhile, Amazon was busy preparing a preemptive strike that would blanket online and offline media with feel-good stories of its grandiose exploits.

Dubbed the biggest bookselling event in e-commerce history by none other than the king of e-tailing, Amazon tag-teamed with FedEx to deliver a highly publicized marketing blitz that would have made P.T. Barnum green with envy. Oft sounding more like a sophisticated military operation, the event collected more goodwill, free publicity, and buzz than any string of multi-million dollar Super Bowl ads. And rival barnesandnoble was missing in action.

Amazon blew the doors off most consumers expectations by pricing the hardbound Harry Potter book 40% off the cover price, or $15.57. In the week preceding the "big literary event," barnesandnoble.com priced the book 30% off, or $18.16. Not until hours before the Harry Potter book would go on sale did barnesandnoble execs finally match Amazon's bargain price. But by then, the damage had already been done. And Amazon had already won. Again.

According to Amazon's nifty hour-by-hour Muggle count, the company has shipped nearly 400,000 copies of the bestseller, rivaling even offline Barnes & Noble. A barnesandnoble.com spokesperson announced roughly 7,000 orders per day rolling in. At that rate, it would take barnesandnoble.com about two months to catch up. Which not-coincidentally has been the story all along between these two rivals. The early bird gets the worm. Or a day late, and a dollar short. Feel free to choose your own adage.

Smaller brick-and-mortar bookstores spent their share of time gnashing teeth at Amazon's one-upmanship. They claimed the company couldn't offer that extra mile of personal service. Well, anyone who says that, never ordered a book from Amazon. My own Mom is an analog gal in a digital world, and you should have seen the way she gushed at the little brown-paper package so carefully gift wrapped when it arrived from drizz