The Wall Street Journal reports:

The $9.99 best seller that helped Inc. build a dominant position in the now-thriving e-book market was at risk of extinction Sunday after Amazon capitulated in a battle sparked by the launch of Apple Inc.’s new iPad.

Amazon conceded defeat Sunday evening after halting sales of all books published by Macmillan in a dispute over higher e-book prices. Having made the $9.99 e-book a fixture, Amazon now faces the prospect of raising its prices to match new terms Apple is offering publishers.

This is not over folks. We’re going to see a continued power play from the old school publishers as the Amazon Kindle, Apple iPad and others take over the market.

As we discussed here, the winner will be the player that controls distribution. Will that be the traditional publishers?