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B&N.com Pulls Plug on E-Bookstore

In what amounts to a major blow to the electronic publishing sector, New York-based online bookseller BarnesandNoble.com announced it would stop selling e-books because of poor sales and limited technology.

BarnesandNoble.com, the online arm of the bookseller giant, made the surprising announcement in an e-mail to customers which urged that purchases be downloaded before December 9. The decision to pull the plug on e-book sales comes exactly three years after BarnesandNoble.com launched its e-bookstore in a technology partnership with Microsoft .

Since then, the company has been an aggressive player in the electronic publishing space, going a step further in 2001 with the rollout of BarnesandNoble Digital, an electronic publishing imprint. That move put the bookseller into a new role as book publisher by creating a direct link between authors and their readers.

That move, along with a crucial deal with Adobe hinted at BarnesandNoble's strength in the nascent sector, where published works are delivered in easy-to-read formats to handheld digital devices.

But, it appears the market was not as lucrative as the company originally envisaged. "The market hasn't developed quickly enough...The product isn't user friendly, or price friendly," BarnesandNoble CEO Marie Toulantis told the Wall Street Journal. Toulantis said publishers failed to make enough of a pricing distinction between hardcovers and their e-book counterparts, effectively softening the market. BarnesandNoble officials did not return calls seeking additional comment.

There is speculation in the publishing industry that the BarnesandNoble.com move was linked to rival Amazon.com's decision to roll out a full-text searching feature at its Web storefront. The new Amazon.com tool, dubbed "Look Inside V2," will allow keyword searches on full-text of books, a feature that's sure to be a hit with online shoppers.

Amazon.com has been BarnesandNoble.com's main competitor in the marketplace and an aggressive pricing strategy for e-books has hurt Barnes&Noble's bottom line.

Yahoo also has an e-book sales section on its shopping section as part of a deal with four major publishing houses -- Penguin Putnam, Simon & Schuster, Random House and HarperCollins.