Amazon officials said the cut-rate prices, introduced on May 17, will apply to all hardcover and paperback books appearing on the New York Times bestseller lists. That amounts to about 70 books a week, including such current titles as "The Greatest Generation" by Tom Brokaw and "The Courage to be Rich" by Suze Orman. Seattle-based Amazon traditionally has offered best-selling books at 20 to 40 per cent below list price.

For more than a year, Amazon and Barnesandnoble.com have kept book discounts fairly steady at 20 to 30 per cent for most titles and have matched each other's prices quite closely. The two booksellers have focused their rivalry instead on marketing campaigns, more detailedreviews, and various attempts to personalize services to match various shoppers' tastes.

Barnesandnoble.com, based in New York, is 50 per cent owned by Barnes & Noble Inc.

Meanwhile, a few "no frills" merchants such as Buy.com Inc. of Aliso Viejo, California, have discounted books as much as 50 per cent but haven't done nearly as much to promote their Web sites or create a literary ambiance online. As recently as last month, Amazon's chief executive officer, Jeff Bezos, said he didn't regard such merchants as major competition to his company.

With its price cuts, though, Amazon appears to be signaling a desire to expand its already dominant market share in books, and is willing to stomach further losses to do so. Amazon incurred a $61.7 million loss in this year's first quarter but can sustain such deficits almost indefinitely. It has over $1.4 billion in cash on its balance sheet.

The Asian Wall Street Journal