Sent to you by Sean McBride via Google Reader: Google To Open An
iTunes For Books via Silicon Alley Insider by Nicholas Carlson on
Google (GOOG) just got into the digital book-selling business, agreeing
to open an online store as a part of its $125 million Book Search
settlement with the Authors Guild and five major book publishers.
Google will set prices with an algorithm and send 63% of all revenue to
rights holders, keeping 37% for itself.

The U.S.-only store is designed initially to sell online access to
copyrighted, out-of-print books, though newer books could be available
for sale if authors and/or publishers allow Google to sell them.
Libraries will be able to access the books for free, while college
students will be able to sign up for subscription-based access from
their dorms.

This puts Google into closer competition with (AMZN), which
sells digital copies of books for its Kindle gadget.

What we don't know: What format Google will offer the books in, whether
buyers will be able to download them for offline or mobile use -- on an
iPhone, or Kindle, for instance -- or whether they'll be printable.

The Wall Street Journal says Google's top lawyer David Drummond "played
down," the competition with "noting that Google's main
objective is to build a better search product."

In a separate interview about the news, however, Google cofounder
Sergey Brin sounded a more optimistic note, even suggesting Google
could expand the store to include more media types:
"I do support this idea that there are definitely high-value pieces of
information that people are willing to pay for and buy, and [the
payment model] should be up to the individual who produces it. I hope
that we can broadly [sic] new model to more media types."

It's easy to explain Drummond's reserve. In April, Deutsche Bank's
Jeetil Patel figured that after investing $300 million in digital
product development over the past three years, Amazon sold only $100
million worth of digital books, music and videos.

Others, however, favor Brin's optimism: Pacific Crest's Steven
Weinstein said in June that he expects Amazon to sell $2.5 billion
worth of e-books by 2012. Because all but 1% of Google's revenues come
from PC-based Web search, and the company eventually needs to diversify
its revenue sources, we'll side with Brin.

See Also:
Oprah Endorsing Amazon's Kindle
Amazon's Kindle Gets Exclusive On Dueling First Lady Books
Amazon: No New Kindle In 2008

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