The New York Times has an article with a somewhat sinister air about it,
detailing the various ways in which Amazon is trying to position itself in between the publishing houses and the consumer. Their lock on the Kindle platform makes it a natural for Amazon to start publishing their own titles, which (by all accounts) has the publishing industry terrified.
To be fair, there are few things that have happened in the last three decades that haven't terrified the publishing industry. From the advent of desktop publishing in the late 1980s and early 1990s, to the rise of the internet and self-publishing meccas like Lulu. It seems like every advance in technology causes the publishing industry to run and hide.
An alternate approach might be to, like, embrace technological advances. Any published author with a modicum of technical savvy has loads of stories about how technologically behind-the-times most publishers are. The vast majority still require physical copies of manuscripts to be sent, simply because they don't have the ability to cope with emailed attachments.
If you follow the publishing industry very closely, it soon becomes routine to hear that all of the publishing houses are about to be put out of business. In this case, as in the last few panics, it's "The Boy Who Cried Amazon."
The obvious solution to this conundrum is for publishing houses to contract directly with Amazon to print books for Kindle. Currently, these negotiations treat Kindle contracts as a distant consideration, trailing behind the more traditional hardback sales. Which is clearly ridiculous, given the sales numbers for eBooks over the last few quarters. EBook sales are one of the few growth sectors in our economy today; you would have to be a little foolish not to embrace it, right?
It's also not anything new for a major bookseller to have its own publishing wing. Barnes & Nobel has its own publishing, and has since the 1980s. They started by publishing out-of-print titles, and have since acquired both SparkNotes and Sterling Publishing.
Ultimately, my biggest concern out of this is for Amazon. Going into the publishing businesses has to be one of the worst mistakes you could make as a business. I hope they don't sink too much money or effort into this project! But Amazon has proven itself to be fairly business-savvy over the years. My guess is that this is just a bargaining maneuver, nothing more. It's not pretty to watch someone work the bully pulpit, but it's a far cry from The Death Of Books.