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Google sparks e-books fight with Kindle

2009-10-19 10:37:10

By Georgina Prodhan Georgina Prodhan Thu Oct 15, 5:09 pm ET

FRANKFURT (Reuters) Google 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 or Barnesandnoble.com. Google will host the

e-books and make them searchable.

Google spokeswoman Jennie Johnson said many of the details of the project,

including which online retailers would participate and whether the digital

books would be viewable on e-readers like the Amazon Kindle, have yet to be

determined.

Google also ruled out making the device itself.

"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.

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.

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.

Turvey said Google would give publishers 63 percent of revenues and keep 37

percent for itself where it sold e-books directly to consumers. Google already

partners with publishers to make physical books searchable and available for

sale.

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.

Kaufman Brothers analyst Aaron Kessler said it was not surprising that Google

plans to sell electronic books, but the near term revenue potential may not be

as high as other opportunities such as display and mobile advertising.

COMPETITION FOR AMAZON

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.

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.

Last week, 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.

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.

Microsoft also had been rumored to be planning a reading device, but CEO 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 is 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.

The American Association of Publishers and the Authors Guild have sued Google

for scanning some books without permission from copyrights holders. The parties

have now reached a settlement but were asked by a U.S. court to revise some

details, and are due to file a revised version on November 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.