As you might imagine, this is exciting news for us. We launched Smashwords three years ago, and now this happens. We are blessed.
In the last 18 months, Smashwords has developed successful ebook distribution relationships with the Apple iBookstore, Barnes & Noble, Sony, Kobo and the Diesel eBookstore. Noticeably absent from the list is Amazon, the world's largest ebook retailer. Problem solved.
The combined company is named Smashazon.
I can hear the naysayers already. Sure, $69 billion is a lot of pay for distribution, but we think it's money well-spent, especially when it's someone else's money. We purchased Amazon with one of those no-money-down deals sponsored by the US Treasury Department. Full details are below in our our official press release.
Other naysayers probably think this is some cruel April Fool's prank. Can we help it that April 1 landed on April 1? Read on and decide for yourself.
FOR IMMEDIATE RELEASE
Smashwords Acquires Amazon in World’s Largest Leveraged Buyout
(Los Mirages, Calif. and Seattle WA) – April 1, 20111 – Smashwords, a leading ebook distributor, today announced a definitive agreement to acquire Amazon for $149.99 a share or $69 billion, a 20% discount off of yesterday’s closing list price.
The merger will create the world’s largest ebook publishing and distribution platform serving billions of authors, publishers and consumers worldwide.
The combined company, to be renamed Smashazon, will undergo a strategic product line rationalization.
Although Amazon has achieved minor success in the ebook market, the Smashwords management team believes it can lead Amazon to greater success by eliminating its distracting non-book operations.
“Amazon’s doing bang-up business in edible undergarments,” said Mark Coker, founder and CEO of the company formerly known as Smashwords. “Although we appreciate their focus on customer satisfaction, these products don’t fit with our palate or long term vision. We’d rather please the customer with words. The words of great stories light up our imaginations to create sights, sounds, smells and experiences more vivid than reality.“
The Smashwords management team is optimistic the former Amazon can leverage some of their non-book experience to sell more ebooks.
“Ebooks could taste and smell better,” said Jeffrey Bezos, former Amazon CEO who will assume the new position of Chief Satisfaction Officer at Smashazon. “We will fully service the needs of our customers.”
Following the acquisition, Smashazon will operate as a private company. The combined companies’ physical operations will be consolidated into the current Smashwords Smashoplex campus in Los Mirages, California.
Financing for the leveraged buyout was arranged by Smashwords Bank, N.A., a newly formed FDIC-insured banking institution that has secured a $69 billion credit line facility. The massive credit line, which makes this the largest-ever leveraged buyout in world history, was enabled by a new US Federal Reserve zero –interest– rate economic stimulus program called “Regulated Overnight Treasury Facilitation Loan Maturity Acquisition Obligations,“ better known as ROTFLMAO.
At a press conference to announce the acquisition, Coker said he expects the new Smashazon will pay off the US taxpayer-funded loan within five years, based on his projection that ebooks will grow from 10 percent of the overall book market today to over 450 percent of the market within three to five years.
“Amazon generated over $3 billion dollars in cash flow in 2010, and Smashwords generated nearly that much,” added Coker with an air of understated modesty that led some market observers to infer Smashwords’ cash flow might actually exceed Amazon’s.
“This acquisition proves that Smashwords is bigger than Amazon, otherwise the acquisition wouldn’t have been possible,” said one publishing industry consultant in attendance who requested anonymity.
When a reporter challenged Coker about the mathematical impossibility of any market growing to 450% of its future size, Coker responded, “We were wrong to underestimate the growth of ebooks to date, so the laws of probability therefore indicate an underestimation of the probable potential of ebooks in the future, no matter how improbable. The market will grow faster than any of us expect, which means my projections understate the true potential of the ebook market.”
Smashwords, which was founded a mere three years ago, now publishes and distributes over 41,000 ebooks from 16,000 authors and publishers around the world. The company’s catalog, which added 5,400 books in the last 30 days, is on track to surpass over 75,000 ebooks by the end of 2011.
Smashwords distributes ebooks to most of the major ebook stores, including the Apple iBookstore, Barnes & Noble, Sony, Kobo and the Diesel eBook store. Noticeably absent from this list is Amazon, a problem now remedied by the acquisition.
“We’re thrilled our ebooks can now flow to our new Smashazon KindleWords store,” said Coker.
One Smashwords insider, who asked not to be identified, commented, “We reached profitability last year, but billions in profits? I want a raise! Our office is only 1,200 square feet, so where are all those thousands of Amazonian employees going to fit? And we’re based in Los Gatos, not Los Mirages. This smells of an April Fools prank to me.”
Created by the fictional merger of Smashwords and Amazon on April 1, 20111, Smashazon, Inc. will again become known as Smashwords starting April 2, 2011. Founded in 2008, privately held Smashwords operates the world’s leading ebook publishing and distribution platform serving authors, publishers, readers and retailers. Smashwords makes it free, fast and easy for the world’s authors and publishers to publish and distribute multi-format ebooks. Smashwords puts authors and publishers in full control over the pricing, sampling and marketing of their works. Authors and publishers receive 85 percent of the net proceeds from sales of their works. Smashwords has distribution relationships with leading online retailers such as Apple, Barnes & Noble, Sony, Kobo and the Diesel eBook Store, and also distributes to the leading mobile e-reading apps including Aldiko and Stanza. Smashwords is based in Los Gatos, California, and can be reached on the web at http://www.smashwords.com/. Visit the official Smashwords blog at http://blog.smashwords.com/.
Our previous April Fool's prank was in 2009 when we announced an ebook deal with JK Rowling (we can wish, can't we!?!)
April 1 or not, I believe this announcement. Thousands wouldn't, but I do!! So, truly, my sincerest congratulations to Smashwords on their acquisition.
Judy Croome, South Africa
Marvelous. Just marvelous. :-)
I was waiting for something like this lol. Nice job. ^_^
The awesomeness of this post blows me away. :D
This made my day. Go get 'em, Mark!
I hope this is a prank, but if not. Yay! Smashwords only grows and grows. Long Live... uhm... Smashazon... 69 Billion tears couldn't we give it a better name? Amazonian Smash? Whatever. Good on Y'all.
everyone is going to love it !!
Well, that's the distribution sorted. :-)
Jeez! does this man we all gotta drop our prices to $0.80c?
Can't wait until the new Smindle e-reader comes out.
*ROFLMBO* okay, now that's funny!
Finally, I have been waiting for this!
ha ha! this was fun! ;)
That's all very well, but how about handing out some shares in Smashazon for those hardworking authors who have been supporting Smashazon's parent company all those years? (OK, three months in my case, but were talking about the principle of the thing) I mean, fair's fair and Coker should spread the joy a little.
If not, we should organize an author's revolt. Go to your Dashboard and opt out of Amazon distribution NOW!
Mark, Let us know when Smashazon acquires the Library of Congress and e-publishing rights to all the books there, okay? :-) Fran Shaff
I have another brilliant business proposal for that "Regulated Overnight Treasury Facilitation Loan Maturity Acquisition Obligations" - I think I´d better be in touch with them today ;)
@MARK HILL: Smindle! I love it! I can see myself now, hunched over my Smindle, stroking it, whispering, "My precioussss! My preciousssss!"
Judy Croome, South Africa
The U.S. Treasury Department has spent more for less. It's not so far-fetched. The irony is I believe that day will come. Better grab the domain Smashazon.com now, Mark.
Ha - Smashazon. Love it. mark, you crack me up.
Love the humor on this snowy day. Fiction leads to reality, one never knows :)
Great post, Mark! Nice attention to details. Wish you smashing success ...
Mark, give Bezos a call. Make the offer. Ya never know. ;-)
I welcome our new ebook overlord...
@Germiux, over at the official Smashwords Facebook page, we let Smashwords authors, publishers and readers vote on what they wanted to call themselves (they voted overwhelmingly for "Smashers") so once this acquisition is approved by the Federal Trade Commission we'll put it up for a vote and let Smashwords members choose the name.
@Roy, it means that all authors publishing to the Smashazon KindleWords Store now have the same pricing flexibility they have at Smashwords: FREE + anything $.99 and above, will 85% net royalties across all price points, and 60% list across all pricepoints. Oh, and the KindleWords Store will offer multi-format DRM-free for all. And the books will smell better, though Jeff hasn't worked out the proper fragrance-emitting technology for that yet.
@Mark Hill: Smindle = hilarious. :)
@Classqm: Funny. We've moved the opt out screen is over here: http://kdp.amazon.com :)
@Fran: Yes, next, Library of Congress, then Google. Google is priced at $190 Billion today.
What! They just offered me an exclusive e-book deal that guarantees a payout of a minimum of $25,000 per month, with a signon bonus of $100,000. Shares of stock were also mentioned, but you know how I hate to brag! My wife says it's fantastic as she is pregant with twins at the age of 56 and we will now be able to afford a nanny. So how will this effect the deal we have in the works? Should I tell her to hold off on ordering the new flying car that's being released this year?
"I predicted this in a blog post dated 1/April/1969. Trust me, would a high elf lie?" - Shirker John
Rather like the announcement that Apple and Microsoft have merged and will be called MicroApple or SoftApple. Microsoft must always be first.
Mark Coker, you are a bad, bad man. =)
April Fool's Day may just be my favorite day of the year! Having more laughs than anyone should have while "working." My daughter just called me to say she'd been caught shoplifting. That one, not so funny!
Fortune favors the bold. Well done. Love the new mascot, by the way.
Mark, you are a clever, clever man! I wanted to laugh as I read the post, but I held back, wanting to believe.
Who knows? You've proved the impossible is possible! Good luck to us all at Smashwords!
Nice one. =)
When you buy Google, will that be called Smoogle or Googwords?
i can't wait for this to really happen Mark or Smashwords will become so popular, ppl will say Amazon who? when they want to buy a book.
What in the world? I hate April Fools Day.
I think it was Brezhnev at the UN who "jokingly" said when Russia takes over the world they'll leave New Zealand as a capitalist country. That way they will know how to price everything.
Maybe when Smashers do a leveraged buyout of Earth we should leave out e-bay.
Have your people call my people and we'll do Europe.
Love it! Yes, dream on!
Yeah, this would be a great thing to have for real. And I really do like the duck bill logo. Much better than the smile alone.
Mark, this is too funny :). Viva Smashazon!
Very good for April Fools, but ya know, the way Smashwords is growing, as far as the ebook market, ya just might be seeing a SmasKindle one of these days!
It's just a fabulous news.
Along five minutes, I did not believe my eyes.
But I know that, today, Amazon belongs to Smashwords.
Tomorow, may be not. But today, we can believe it... until midnght, it's a great news.
LOL. I'm with Mark Hill, I want the new e-reader.
When my April 1st announcement that tax rates had been halved to stimulate growth in NZ happens- I can afford to buy shares...
You have my compliments on this one... I've been laughing since I first read it!@
I know you didn't use me as a financial reference, but if you did, you could have purchased the Golden Gate Bridge instead.
This MUST be an April Fools joke. Good one, Smashwords.
WOW, I totally fell for it --- I was hoping!!
Great for publicity though, Mark. Kudos!
All My Best,
Almost fell for it too then remembered it was 1.04.11. Great. Really funny. As good as the "Spagetti Trees TV Spoof" all those years ago. As a child I was convinced for some months that spagetti grew on trees.
OMG, I'm such an airhead. I read this last night thinking it was true >.< ayayayay the name Smashazon would have been tragic!
Bravo! Truly inspired and hilarious! All hail Smashazon!
Fantastically funny! If only it really was true!
Don't discount the edible underthings. Shortly before the aquisition, and as yet not listed in the catalog, edible panties which include text, and if your press the right buttons text-to-voice is switched on. Nobody else has this!
This is simply stupid. I would have hoped that this was going to be a good company to work with, not a bunch of goofballs.
I love the name. Very clever. Thanks Mark. Thanks Smashwords and Smashazon.
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