[gui-talk] Fwd: Article: Preparing to Sell E-Books, Google Takes on Amazon

[Steve Pattison]

 From:    Erika Webb erikaweb at yahoo.com.au
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Preparing to Sell E-Books, Google Takes on Amazon
By MOTOKO RICH
Published: May 31, 2009

http://www.nytimes.com/2009/06/01/technology/internet/01google.html

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

In discussions with publishers at the annual BookExpo convention in New York 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’s move is likely to be welcomed by publishers who have expressed concerns about the possibility that Amazon will dominate the market for e-books with its aggressive pricing strategy. Amazon offers Kindle editions of most new best-sellers for $9.99, a price far lower than the typical $26 at which publishers sell new hardcovers. In early discussions, Google has said it would allow publishers to set a suggested list price, but that Google would ultimately set consumer prices.

“Clearly, 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,” said David Young, chief executive of Hachette Book Group, which publishes blockbuster authors like James Patterson, Stephenie Meyer and Nicholas Sparks.

Google’s e-book retail program would be separate from the company’s settlement with authors and publishers over its book-scanning project, under 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 the 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’s largest competitor.

Under the new program, publishers give Google digital files of new and other 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: “This time we mean it.”

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 “CSI” and “The Brady Bunch.” 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’s program would allow consumers to read books on any device with Internet access, including mobile phones, rather than being limited to dedicated reading devices like the Amazon Kindle. “We don’t believe that having a silo or a proprietary system is the way that e-books will go,” he said.

He said that publishers would be allowed to set list prices but that Google would price the e-books for consumers. Amazon also lets publishers set wholesale prices and then establishes its own prices for consumers. In selling e-books at $9.99, Amazon effectively takes a loss on each sale because publishers generally charge booksellers about half the list price of a hardcover ­ 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 “exorbitant.”

Miguel Helft contributed reporting.

Correction: An earlier version of this article incorrectly stated that publishers would establish retail prices for books sold through Google's e-book program. Publishers will be able to set a list price, but Google will set the price paid by consumers.

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