Borders to Open Online Book Store

Borders is about to take its online fate into its own hands, as it plans to reopen its own online store and end a several year partnership with Amazon.com. It also announced that it will abandon its international strategy, choosing to focus domestically.

Amazon took over Borders' online service in 2001 following the dot-com stock market crash. While it was branded with the company's name, all proceeds except for a commission on sales was kept by the online retailer.

The store closings will also extend to its Waldenbooks stores within the US, likely aimed at curbing the company's slide. For the quarter, the company posted a net loss of $73.6 million, versus a profit of $119.1 million a year previous.

Retail book sales are beginning to slow, and it appears as if the No. 2 retailer would like more control over its online offerings in order to offset those losses. Its competitor, Barnes and Noble, its not doing much better.

However, B&N's problems are more associated with an unwillingness to compete on price with Amazon.com. Sales dropped 1.1 percent in the last quarter, and have stayed at about 10 percent of the company's total revenue.

It is not clear if Borders would take a similar route, or attempt to take its former partner head on by lowering prices on its website. It has a lot of ground to cover - it chose to focus on its brick and mortar stores while allowing Amazon to control its online presence.

At the time of the deal, it saw online sales as a minor portion of its business. That assumption was obviously wrong, considering the massive success Amazon has had in building its business.