[advocate2]

The Wall Street Journal has an interesting article about which stock to buy given current pricing and the future impact of EReaders. They conclude that Amazon stock has peaked but that in the future EReader sales Barnes and Noble has great growth potential.

....

And then there's the e-reader business.

This is a new industry, which means nobody knows for certain what will happen next. The naive—and most common—approach is to assume the future will look like the near past. Amazon's Kindle, which is easy to use and lets you download books and other reading matter wirelessly, has transformed the industry. All credit to chief executive Jeff Bezos. And the company isn't hanging around. It just cut the price of the Kindle, and at last launched an overseas version as well.

But that does not mean Amazon's lead will last.

(After all, Palm once dominated the hand-held organizer business and look where that got them.)

The Kindle has weaknesses. Books purchased on an Amazon Kindle can only be read on a Kindle (or an iPhone). The company uses a proprietary closed format. As I've mentioned here before, it risks making the Kindle the Betamax (Bezomax?) of e-readers.

Meanwhile Amazon's competitors, including Barnes & Noble, are moving to an open, shared standard known as ePub. Books purchased in ePub can be read on any other device, including laptops. A wave of new e-readers hits stores this fall. And at long last, these are copying Kindle's key feature—the connection that lets you browse and buy wirelessly. Consumers finally have a real choice....