[A2k] NYT: Preparing to Sell E-Books, Google Takes on Amazon

[Meredith Filak]

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http://www.nytimes.com/2009/06/01/technology/internet/01google.html?th&emc=
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NYT: Preparing to Sell E-Books, Google Takes on Amazon

By MOTOKO RICH

Google appears to be throwing down the gauntlet in the e-book market.

In discussions with publishers at the annual BookExpo convention in New Yor=
k
over the weekend, Google signaled its intent to introduce a program by that
would enable publishers to sell digital versions of their newest books
direct to consumers through Google. The move would pit Google against
Amazon.com, which is seeking to control the e-book market with the versions
it sells for its Kindle reading device.

Google=92s move is likely to be welcomed by publishers who have expressed
concerns about Amazon=92s aggressive pricing strategy for e-books. Amazon
offers Kindle editions of most new best sellers for $9.99, far less than th=
e
typical $26 at which publishers sell new hardcovers. In early discussions,
Google has said it will allow publishers to set consumer prices.

=93Clearly, any major company coming into the e-book space, providing that =
we
are happy with the pricing structure, the selling price and the security of
the technology, will be a welcome addition,=94 said David Young, chief
executive of Hachette Book Group, which publishes blockbuster authors like
James Patterson, Stephenie Meyer and Nicholas Sparks.

Google=92s e-book retail program would be separate from the company=92s
settlement with authors and publishers over its book-scanning project, unde=
r
which Google has scanned more than seven million volumes from several
university libraries. A majority of those books are out of print.

The settlement, which is the focus of a Justice Department inquiry about th=
e
antitrust implications and is also subject to court review, provides for a
way for Google to sell digital access to the scanned volumes.

And Google has already made its 1.5 million public-domain books available
for reading on mobile phones as well as the Sony Reader, the Kindle=92s
largest competitor.

Under the new program, publishers give Google digital files of new and othe=
r
in-print books. Already on Google, users can search up to about 20 percent
of the content of those books and can follow links from Google to online
retailers like Amazon.com and the Web site of Barnes & Noble to buy either
paper or electronic versions of the books. But Google is now proposing to
allow users to buy those digital editions direct from Google.

Google has discussed such plans with publishers before, but it has now
committed the company to going live with the project by the end of 2009. In
a presentation at BookExpo, Tom Turvey, director of strategic partnerships
at Google, added the phrase: =93This time we mean it.=94

Although Google generates a majority of its revenue from ad sales on its
search pages, it has previously charged for content. Three years ago, it
opened a Google video store, and sold digital recordings of N.B.A. games as
well as episodes of television shows like =93CSI=94 and =93The Brady Bunch.=
=94 This
year, Google said it might eventually charge for premium content on YouTube=
.

Mr. Turvey said that with books, Google planned to sell readers online
access to digital versions of various titles. When offline, Mr. Turvey said=
,
readers would still be able to access their electronic books in cached
versions on their browsers.

Publishers briefed on the plans at BookExpo said they were not sure yet how
the technology would work, but were optimistic about the new program.

Mr. Turvey said Google=92s program would allow consumers to read books on a=
ny
device with Internet access, including mobile phones, rather than being
limited to dedicated reading devices like the Amazon Kindle. =93We don=92t
believe that having a silo or a proprietary system is the way that e-books
will go,=94 he said.

He said that Google would allow publishers to set retail prices. Amazon let=
s
publishers set wholesale prices and then sets its own prices for consumers.
In selling e-books at $9.99, Amazon takes a loss on each sale because
publishers generally charge booksellers about half the list price of a
hardcover =97 typically around $13 or $14.

Mr. Turvey said that Google would probably allow publishers to charge
consumers the same price for digital editions as they do for new hardcover
versions. He said Google would reserve the right to adjust prices that it
deemed =93exorbitant.=94

Miguel Helft contributed reporting.