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E-Commerce Price War Escalates, Amazon Expands

Scott Blum's online sales operation Buy.com launched another attack in the e-commerce wars today, this time offering to beat Amazon's book prices by 10 percent.

The move follows last week's offer of free shipping on everything, period. But not to be outdone, Amazon launched a brand new Canadian site, its fifth international operation.

Seattle-based Amazon.com first lowered its free shipping threshold from orders of $99 to $49, but a day later Aliso Viejo, Calif.-based Buy.com, the self-proclaimed "Internet superstore," came out with its free shipping offer.

Buy.com said the latest move is part of an "aggressive strategy to win Amazon's customers and capture greater market share in online book sales."

Buy.com says it has a catalog of more than one million book titles in a variety of categories, including New York Times Bestseller titles currently offered at 50 percent off list price. Amazon offers 40 percent off its top-selling 100 books and 30 percent off the Times list.

Why would anybody pick a fight with a 500-pound gorilla?

"It's a bold move to specifically target the Amazon customer base," said Robert Price, president and chief financial officer of Buy.com.

Of course, the big question is just how thin can margins get in the online competition, and for how long.

"I do not believe that Buy.com's pricing assault on Amazon.com is sustainable," said Ken Cassar, senior analyst at Jupiter Media Metrix. "For it to be so, consumers would have to purchase multiple items in each order, despite the fact that Buy.com offers them no incentive to do so."

Cassar told internetnews.com that he think's it's a misguided bet. "It is very likely ... that Buy.com will steal market share from Amazon in the short term. Whether that is sustainable will depend upon whether customers will come back to Buy.com when there is no promotion."

Privately held Buy.com is best known for its computer and electronics selection, but says it has been selling books since 1998.

"We want consumers to know where the real value is in online book purchases, and enjoy all of the other Buy.com advantages: lower prices, better customer service and better selection," Buy.com founder Scott Blum said. There was no immediate response from Amazon.

In some ways, Buy.com must seem to Amazon more like an annoyance than a competitor. Amazon.com's collective destinations form the second largest U.S. retail site, according to comScore Media Metrix, with 30.9 million unique visitors in May. (eBay ranked first with 33.9 million unique visitors). Buy.com ranked 64th, with 2.4 million unique visitors.

Meanwhile, Amazon.com launched a bilingual, English-French version of its site for Canadians< /a>, letting them shop in the currency of their country and the language of their choice.

Amazon said prices on the site are in Canadian dollars and shipping will be handled by Canada Post Corp. Fulfillment will be handled by Assured Logistics, a Canada Post subsidiary.

The site features 30 percent off books over $30 Cdn and introductory free shipping on orders over $75 Cdn - roughly the equivalent of US$49, the threshold for free shipping in the United States. Initially, the Canadian site will offer only books, music and movies, although electronics sales are on the horizon.

The Canadian site is Amazon's sixth, joining the main site and international sites in Japan, Great Britain, France and Germany.