This Article is From Jun 30, 2010

Stores see Google as ally in e-book market

Stores see Google as ally in e-book market
San Francisco: Independent bookstores were battered first by discount chains like Barnes & Noble, then by superefficient Web retailers like Amazon.com.

Now the electronic book age is dawning. With this latest challenge, these stores will soon have a new ally: the search giant Google.

Later this summer, Google plans to introduce its long-awaited push into electronic books, called Google Editions. The company has revealed little about the venture thus far, describing it generally as an effort to sell digital books that will be readable within a Web browser and accessible from any Internet-connected computing device.

Now one element of Google Editions is coming into sharper focus. Google is on the verge of completing a deal with the American Booksellers Association, the trade group for independent bookstores, to make Google Editions the primary source of e-books on the Web sites of hundreds of independent booksellers around the country, according to representatives of Google and the association.

The partnership could help beloved bookstores like Powell's Books in Portland, Ore.; Kepler's Books in Menlo Park, Calif.; and St. Mark's Bookshop in New York. To court the growing audience of people who prefer reading on screens rather than paper, these small stores have until now been forced to compete against the likes of Amazon, Apple and Sony.

The Google deal could give them a foothold in this fast-growing market and help them keep devoted customers from migrating elsewhere.

"Google has shown a real interest in our market," said Len Vlahos, chief operating officer of the booksellers association, which has over 1,400 member bookstores. "For a lot of reasons, it's a very good fit."

Google will probably face an uphill battle in its effort to enter the already crowded e-books field. The company has little experience as a retailer. It also has far fewer consumer credit card numbers in its database than either Amazon or Apple, and its online payment system, Google Checkout, has not been widely adopted.

Nevertheless, Google is promoting its e-book plan as a fundamentally different and more "open" alternative to its rivals' stores. Though it will act as a retailer and sell books from its own site, it will also behave like a wholesaler and allow independent bookstores and other partners to sell its e-books on their own sites.

People who buy Google e-books will not be locked into any particular reading devices or book formats, the company said. Books bought from Apple's iBookstore, by contrast, can be read only on Apple devices.

"I don't think anyone who has bought an e-reader in the last several years has really intended to only buy their digital books from one provider for life," said Tom Turvey, Google's director of strategic partnerships, who heads the Google Editions project.

Mr. Turvey said that customers would be able to get access their books, or buy new ones, from anywhere in the world by entering their Google credentials. And he said Google would introduce the service with a broad selection of hundreds of thousands of books, including trade fiction, nonfiction and professional, scholarly and academic titles, including textbooks.

Google already has two million books that publishers have made available as part of its Partner Program, which allows Web users to sample lengthy previews of books on Google's site and other sites. A separate project to scan millions of out of print or hard-to-find library books has been tied up in litigation since 2005.

As a wholesaler, Google will play a role similar to that of offline distributors like Ingram Book and Baker & Taylor, which buy books from publishers and resell them to bookstores. Those companies generally keep a single-digit percentage of each sale, and Mr. Turvey said Google would operate along similar lines.

Independent bookstores seem to believe that Google is more interested in working through them than being a direct retailer. In fact, they are banking on it.

The e-book wave has forced such bookstores to confront a complex and rapidly changing field. Back in 1999, Powell's in Portland, for example, made a bet on selling e-books for the pioneering e-book company Rocket Book, only to see it go out of business. More recently, with the help of Ingram Digital, Powell's has tried selling e-books on its Web site in a jumble of formats provided by the likes of Adobe, Microsoft and Palm.

These efforts have yielded little in return, and devices like the Amazon Kindle, Barnes & Noble Nook and Apple iPad have captured readers' attention.

"Google would allow us to play completely outside the device-centric game," said Darin Sennett, the director of Web development at Powell's.

Mr. Sennett acknowledged that Google would also be a competitor, since it would also sell books from its Web site. But he seemed to believe that Google would favor its smaller partners.

"I don't see Google directly working to undermine or outsell their retail partners," he said. "I doubt they are going to be editorially recommending books and making choices about what people should read, which is what bookstores do."

He added, "I wonder how naïve that is at this point. We'll have to see."

Google's move toward selling digital books coincides with its broader overall shift into selling digital media. Since its inception, Google has made money almost exclusively by placing text advertisements alongside search results and on Web pages.

But now rivals like Amazon and, increasingly, Apple are trying to ensconce themselves in people's lives, and wallets, by storing customers' movies, TV shows, music and books on their own servers. The companies hope that storing people's media collections will generate further digital sales while also locking customers into the devices they sell, like the Kindle and iPad.

Google has one advantage in these nascent media wars. It can count on a large number of people entering media-related search queries into its search engine -- looking for John Irving's latest novel, for example -- and reflexively clicking on the first buying option that is presented.

In an interview last week, Eric E. Schmidt, Google's chief executive, said Google Editions was a "natural outgrowth of us being interested in books and information and working with publishers." Asked about digital music, he said Google had long avoided the music business because it did not want to enable piracy.

But more recently, as Google looks to offer customers more of what they are searching for without having to click elsewhere, he said, "it makes sense to have some sort of facility with music."

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