Borders returns to Web retailing after 7 years

This March 14, 2006 file photo, the interior of a Borders is shown in downtown Detroit. Borders Group is jumping back into online retailing with a Web site designed to evoke the feeling of browsing at a neighborhood bookstore, down to the popular shelves of staff picks that are familiar to its customers nationwide. The Tuesday May 27, 2008 launch of the site comes more than two months after Borders announced it may put itself up for sale. (AP Photo/Paul Sancya, File)

DETROIT—Borders Group Inc. is returning to online retailing after seven years paired with Amazon.com, but analysts say it will be a challenge for the nation's second-largest bookseller to compete with established Web retailers.

The move comes as Borders, which has said it may put itself up for sale, has lost market share both to online retailers and to discounters such as Wal-Mart Stores Inc. amid a difficult economic climate in the United States.

It's a long shot, analysts say, in an environment where people are spending less and Amazon.com rules.

"Amazon just dominates," said Fred Crawford, managing director at turnaround consultant AlixPartners who has studied consumer attitudes toward major booksellers. "Amazon is nearly unassailable."

In 2001, Borders abandoned its money-losing online business, turning it over to Amazon. Under that arrangement, Borders.com took shoppers to a site partnered with Amazon, while a Web site for its stores allowed shoppers to check inventories and reserve items.

Seattle-based Amazon says it doesn't comment on the strategies of other companies and didn't have any comment on the end of the Borders partnership.

Tuesday's launch of Borders' new Web site comes more than two months after the Ann Arbor-based company announced it may put itself up for sale. Just last week, Barnes & Noble Inc. confirmed it put together a team to study the feasibility of a deal.

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On the Net:

Borders Group Inc.: http://www.borders.com