Google Ready to Take On Kindle in E-Books
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Google (NASDAQ: GOOG) plans to launch an online store to deliver electronic books to any device with a Web browser, threatening to upset a burgeoning market for dedicated e-readers dominated by Amazon's Kindle.
The Web search giant said on Thursday it would launch Google Editions in the first half of next year, initially offering about half a million e-books in partnership with publishers with whom it already cooperates, where they have digital rights.
Readers will be able to buy e-books either from Google directly or from other online stores such as Amazon.com (NASDAQ: AMZN) or Barnesandnoble.com. Google will host the e-books and make them searchable.
"We're not focused on a dedicated e-reader or device of any kind," Tom Turvey, Google's director of strategic partnerships, told journalists at the Frankfurt Book Fair.
The announcement comes a week after Amazon said it would introduce the Kindle into 100 countries outside the United States, pushing its leading position in a small but fast-growing market in which its competitors include Sony's Reader.
Technology research firm Forrester expects about 3 million e-readers to be sold in the United States this year, from a previous base of about 1 million, helped by lower prices, more content and better distribution.
Top U.S. bookseller Barnes & Noble has been reported to be planning an entry into the e-reader market to complement a large online bookstore it launched in July.
Amazon shares fell 2 percent in early trading in New York, while the Nasdaq slipped 0.4 percent. Barnes & Noble fell 1.2 percent, and Google was down 0.6 percent.
Forrester media analyst Sarah Rotman Epps said Google would not necessarily steal market share from Amazon, although it would strengthen the position of others who support open standards usable across a range of devices, such as Sony's.
"Certainly it presents collective competition to Amazon, but for many consumers the word 'e-reader' is synonymous with the Kindle," she said.
Microsoft had also been rumored to be planning a reading device, but Chief Executive Steve Ballmer said last week it had no need, since it already supplied the software that runs the most popular device for electronic reading, the PC.
Google Editions will allow Google to make money for the first time out of one of its book ventures -- which also include a controversial project to scan and index tens of millions of books through partnerships with libraries.
Google will share revenue with publishers, and also with online retailers in cases where readers buy Google-hosted books through a retailer's site. It already partners with publishers to make their physical books searchable and available for sale.
Turvey said Google would give publishers 63 percent of revenues and keep 37 percent for itself where it sold e-books directly to consumers.
In cases where e-books were bought through other online retailers, publishers would get 45 percent and most of the remaining 55 percent would go to the retailer, with a small share for Google, he said.
Readers will be able to access e-books they have bought through Google on any device including PCs, laptops, netbooks and smartphones like Apple's iPhone through their gmail account, Google said.
The device need not be connected in order to read the book, after it has been accessed once, and payment can be made to Google through its online payment processing system Google Checkout, which stores users' details in a personal account.
Google is also trying to settle a lawsuit in the United States with U.S. publishers and authors over its Google Books project, in which it has already scanned about 10 million books through partnerships with libraries and plans to scan many more.
Google wants to improve its Web search by including the bulk of the world's knowledge that is contained in books by indexing the books and displaying varying amounts in Web search results, depending on whether the books are in or out of copyright.
In a long-running dispute, the American Association of Publishers and the Authors Guild have sued Google for scanning some in-copyright books without permission from rights holders.
The parties have now reached a settlement agreement but have been sent back by a U.S. court to revise some details, and are due to file a revised version on Nov. 9.
Google's Chief Legal Officer David Drummond told reporters: "We are very comfortable and confident that it will go through in some form."
The settlement only applies to the United States but has sparked fierce criticism from some parties in Europe, notably from German Chancellor Angela Merkel, as it covers European books in U.S. libraries scanned in the United States.
Drummond said excluding those books from the settlement was not being debated. "European books will be part of the settlement," he said.