Amazon.com buying BookSurge

In a deal that's being hailed as a confidence builder for the region's technology sector, online retail titan Amazon.com has agreed to buy North Charleston-based publisher BookSurge. Officials from both companies declined to confirm or deny that the deal closed Friday. The sale is expected to be announced at BookSurge's Dorchester Road offices Monday.

Rumors have circulated within the Charleston tech community in recent weeks that a deal was in the making between the innovative "on-demand" book publisher and Amazon.com, a Fortune 500 company with almost $7 billion in sales last year. A person familiar with the terms of the deal said Seattle-based Amazon.com paid $10 million for the North Charleston company. However, BookSurge spokeswoman Lisa Ryan said that figure was "inaccurate and incorrect." She declined to elaborate, saying "full details" will be disclosed next week.

BookSurge employs about 60 workers in North Charleston. Its chief executive is Robert Holt. BookSurge co-founder Mitchell Davis is a senior vice president. They are expected to stay on.

The fast-growing business has been on the cusp of technological changes that are reshaping the way books are bought, sold, ed and distributed. What's revolutionary about the publisher is that it keeps almost no printed books in inventory. The heart of the business is a software-based publishing system that can profitably print and bind as many or as few copies as a retailer or other buyer wants. Its catalog had swelled to 4,000 authors as of last year, and orders are guaranteed to be filled within two days.

Since its launch in 2000, BookSurge has forged business relationships with some of the biggest distributors and retailers in this country and abroad, including Amazon.com. It also works with universities, museums and other publishers. The company has moved quickly to establish operations outside the United States. Its most recent international expansions were in Australia, Greece, Poland and Panama. In January, Holt said BookSurge's goal was to be publishing in 50 countries "within a relatively short period of time."

As a privately held business, the company does not disclose its revenue and earnings, but it said sales increased 60 percent last year over 2003. Exactly how BookSurge will fit into the Amazon.com mold was unclear Friday, but one possibility is that the online giant will install the on-demand publishing systems in its giant warehouses to keep a tighter rein on inventory and reduce storage costs.

High-tech booster Ernest Andrade said the deal underscores the message that emerging businesses can make the leap to the big-time from South Carolina."This is huge," said Andrade, director of the City of Charleston's Digital Corridor, an initiative that works to recruit and retain tech companies.

Andrade predicted that more deals between small local startups and large established businesses are likely to follow. "I'm working with about a half-dozen companies that are heading down this road right now. ... If there's sound bite I'd like to get across it's this: 'They're here,'" he said.

AMAZON.COM AT A GLANCE

Business: Best known for its online book sales, Amazon.com sells many new, refurbished and used items over its global Internet sites, such as jewelry, gourmet food, sporting goods, apparel, music, movies, electronics and toys.

Top boss: Jeff Bezos, chairman, president and chief executive. He started the company in July 1995. Bezos was ranked 17th on Fortune magazine's list of the 25 most influential business leaders of the last quarter-century.

Headquarters: Seattle

Employees: 9,000

Finances: Sales for 2004 were $6.9 billion, up 31 percent. Earnings were $588 million, a fifteen-fold gain over 2003, but that increase was skewed by one-time tax benefits and other factors.

Stock: Trades on Nasdaq under the ticker symbol AMZN. Shares closed at $34.01 Friday, down 26 cents.