SAN FRANCISCO: Google Inc. is making the leap from digital librarian to merchant in a challenge to Amazon.com Inc. and its Kindle electronic reader.
The long-awaited Internet book store, which opened Monday in the US draws upon a portion of the 15 million printed books that Google has scanned into its computers during the past six years.
About 4,000 publishers, including CBS Corp.’s Simon & Schuster Inc., Random House Inc. and Pearson PLC’s Penguin Group, are also allowing Google to carry many of their recently released books in the new store.
Those publishing deals will ensure that most of the current best sellers are among the 3 million e-books initially available in Google’s store, said Amanda Edmonds, who oversaw the company’s partnerships. Millions more out-of-print titles will appear in Google’s store, called eBooks, if the company can gain federal court approval of a proposed class-action settlement with US publishers and authors.
The $125 million settlement has been under review for more than two years. It faces stiff opposition from rivals, consumer watchdogs, academic experts, literary agents and even foreign governments, which worry that Google would get too much power to control prices in the still-nascent market for electronic books. Amazon.com, which started its business as a seller of books over the Internet, is among the competitors trying to squelch the settlement. The US Justice Department has advised the judge overseeing the case that the settlement probably would violate antitrust and copyright laws.
Books bought from Google’s store can be read on any machine with a Web browser. There are also free applications that can be installed on Apple Inc.’s iPad and iPhone, as well as other devices powered by Google’s own mobile operating system, Android.
But Google’s eBooks can’t be loaded on to the Kindle.
Electronic books are expected to generate nearly $1 billion in US sales this year and climb to $1.7 billion by 2012 as more people buy electronic readers and computer tablets such as the iPad, according to Forrester Research. The research group expects a total of 15 million e-readers and tablets to have been sold in the US by the end of the year.
Google believes it’s already offering the broadest selection of digital titles in the world, and it plans to keep adding to the inventory if it can gain the necessary copyright clearances. The company, based in Mountain View, California, believes it eventually will be able to make electronic copies of the estimated 130 million books in the world. It’s also planning to start selling books outside the US next year.
Google’s eBooks store, originally to be called Editions, has been in the works for more than a year. The company already had been showing books no longer protected under copyright in their entirety and displaying snippets of other titles through its widely used search engine.
The company is trying to position its new sales outlet as an ally to publishers, merchants and consumers looking for alternatives to Amazon’s electronic book store, which feeds Amazon’s hot-selling Kindle, but not other e-readers, including Barnes & Noble Inc.’s Nook.
Google’s e-books will work on the Nook, Sony Corp.’s Reader devices and practically every other e-reading device except the Kindle. Google achieves this with the help of Adobe Inc.’s copy-protection system for e-books. That system is already used by public libraries and smaller online bookstores, but hasn’t seen much interest from the major players. Amazon.com, Barnes & Noble and Apple all have their own copy-protection systems.
Google plans to offer sharp discounts on many of its e-books but it will still pay publishers 52 per cent of the list price for sales made on its site, unless another arrangement has been negotiated with an outside agency. The formula means that even if Google elects to sell a book with a $10 list price for $6, the publisher would still be entitled to $5.20.
Forrester Research analyst James McQuivey described Google’s latest effort as a ‘‘game expander’’ rather than a game changer.
The growing embrace of digital sales by the publishing industry is expected to result in the closure of hundreds more book stores during the next few years, adding to a media mortuary of music and video merchants killed by electronic distribution.
Google’s announcement comes on the same day that activist investor William Ackman, who owns a 37 per cents take in Borders Group Inc., offered to finance a Borders-led takeover bid for rival bookseller Barnes & Noble Inc. If successful, it could ultimately lead to closures of overlapping stores. – AP
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