Google sparks e-books fight with Kindle

FRANKFURT Thu Oct 15, 2009 5:09pm EDT

1 of 4. A commuter uses a Kindle while riding the subway in New York, June 1, 2009.

Credit: Reuters/Lucas Jackson

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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.

(Additional reporting by Alexei Oreskovic; editing by John Stonestreet, David Cowell and Carol Bishopric)

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