Google’s entry into the market is key because “it will be reaching potential customers at a unique point in their book-buying journey,” explains Forrester Research’s James McQuivey: “at the point of web search, not at the point of searching the bookstore. This means many things you didn't realize a book can help you with—overcoming depression, remodelling a bathroom, making friends, and influencing people—will now be surfaced alongside all the YouTube and other results Google will offer. This is a net plus for books.”

McQuivey sees another plus for Google—the coupling of ads with the browsing of ebooks. “Since Google intends to provide its books from the cloud, it can deliver ads that are timely and targeted.” It also potentially leads to a model of deconstructing books for added value. “Soon, we will no longer need to force the entire cost of a book on the buyer of the book, but instead can extract value from the reader of the book, in direct proportion to the value they get from it,” McQuivey continues. “In other words, the more pages they read (the more value they get), the more ads they see and the more value the publisher and author receive.”

This represents an interesting challenge for libraries as well. Instead of relying on libraries as a method of accessing some information or book, one can now search, preview, or read books—or portions of them—at their convenience, online anytime, anywhere.

Inside the eBookstore

Users are able to connect to their collections of free or purchased books anywhere using any Adobe eBook DRM-compliant device with a web browser—including an estimated 85 ebook devices or reading systems—that includes the Android, iPhone/iPod Touch/iPad, Nook, or Sony. From the homepage, users of these systems can easily download free applications tailored for eBookstore users. Due to the digitizing work of Google Books, users have the option to view the scanned-in pages of a book instead of the default flowing text.

According to Adobe’s Dave Dickson, “Google decided to use Content Server because it is the most widely adopted eBook DRM that allows users to avoid being locked in to a single device or retailer when purchasing eBooks.” Books are hosted in a cloud server system, allowing users to access their titles anytime, anywhere from the cloud, or store them on a local device.

Notable, in its absence, is any link to Amazon’s Kindle system. Google’s Books Help page, notes that “Google eBooks are not compatible with Amazon Kindle devices, though we are open to supporting them in the future.”

Ebook pricing is compatible with other major providers—Amazon, Barnes & Noble, Apple’s iBookstore, etc.—with current bestsellers retailing at about $10, reduced rates for less popular, in-copyright works, and a wide selection of free, out-of-copyright titles. As ebooks rise in popularity, we can expect to see more differentiation and competition on pricing.

Although buyers have an option in Google’s system to support independent, local bookstores, indie pricing is clearly not competitive with the retailing giants. Although Google has created a place for these indies in the very structure of their eBookstore, the economics do not, at this point, favor the locals.

A Quick Tour

Integrated with the other components of the Google domain, Google eBookstore’s home page allows you to browse by general subject area, search all books or within subject fields, view current top sellers and see a selection of popular covers taken from New Arrivals, Top Rated (ranking by users of the site), New York Times bestsellers, and best of the free titles.

The books are all represented by real or, in the case of some out-of-print titles, mock-ups of covers. By clicking on the covers, or clicking on “about this book” while in a particular book, you get a page that looks similar to an Amazon book page with a book cover, bibliographic metadata, user-written reviews and ratings, and links to view a limited sample or “get it” to acquire a copy. Registration is required to buy or download titles.

As with Google Books, you can search throughout the full-text of books with results highlighted. Texts can be customized to meet the specific needs of users by such elements as line height, justification, text size, typeface, etc. The system works fast, efficiently, and without any apparent bugs or snags for mobile, web, or other versions.

“Google Books meets the same set of benchmarks for acquiring and reading ebooks as established by Amazon’s Kindle,” notes NFAIS’ Jill O'Neill, “but I don't think we can say more than that. Users have been bombarded in recent months with new reading devices, new reading apps for those devices, and even new platforms for interacting with collections of content. As a result, user expectations are set high. But as a user, I see little or no new functionality or greater usability in Google’s interface. There are even some surprising omissions—annotation, for example, or the ability to delete titles from one’s Google bookshelf.”

New, in-copyright books are not currently accessible for the visually impaired; however, Google reports they “are working on building accessibility features into both the Web Reader and other applications.”

Books, Books, and More Books

Google began to develop its ebook holdings in December 2003 with the launch of the Google Print Program (later renamed Google Book Search). By partnering with major international libraries since 2004, Google has digitally scanned millions of books from more than 25,000 book publishers across the globe (and is still going strong). With Google Books, users can preview as much as 20% of copyright-protected book content for free, being directed, then, to publishers, third-party sellers, and libraries for further information or reading. Google’s eBookstore adds another option.

Google currently offers a mix of about 3 million public-domain and contemporary ebooks. Amazon claims to offer 750,000 books for sale in addition to a stable of 1.8 million free books. Apple has a more limited catalog; however, few would ever want or need all of the books being offered by any of these retailers.

Some in the book trade are calling this a “Gutenberg moment” for the publishing industry, just as Gutenberg’s movable type forever changed books and reading so many years ago. Many publishers and bookstores see Google’s model as a positive step in the right direction. “In the long run,” notes McQuivey, “Google eBooks may just convert more people to ereading.”

“Google is acting as an aggregator or wholesaler,” American Booksellers Association COO Len Vlahos notes. Google eBooks users can either purchase a title directly from the Google site or choose to purchase through an independent bookseller. At the time of the Google launch, more than 100 independent bookstores had signed up in an alliance that allows these bookstores to sell Google ebooks on their websites and share the profits with Google so “customers no longer have to choose between reading digital and supporting their local bookstore.” Independent bookstores, that have generally felt left out in the ebook wave, are able to contribute their “wealth of indie recommendations and bestsellers to avid ebook readers.”

Brian Elliott, CEO of Monsoon Commerce Solutions, parent company of Alibris, the “premier online marketplace for independent sellers of new and used books, music, and movies, as well as rare and collectible titles,” sees Google eBooks as providing an important new “way for independent booksellers to provide their local customers access to eBooks through a familiar channel. Independent bookstores who sell on Alibris and members of our Gold Seller program can tap into this opportunity without additional work—Gold Sellers each get an Alibris Store where they can market themselves, their merchandise, and sell their items. They can also earn Alibris Rewards, cash for sales driven to other sellers in the network and sales of Google eBooks.” Elliott sees the Google deal as a plus: “Independents who provide good service, know their customers well, and adapt to new opportunities—like Alibris and Google eBooks—will do well in the years to come.”

Even the U.S. federal government is signing on. “GPO has been offering federal publications for more than 100 years and this partnership with Google opens the door for a new way to publicize the titles available from the federal government,” explained GPO Publication and Information Sales managing director, Davita Vance-Cooks. “GPO has been looking for the best way to move into this new sales channel. And since Google did all the scanning and digital conversion, this didn’t cost GPO or the taxpayers any money.”

Elsevier, “an early participant in Google Book Search,” announced 2 days after Google’s release that it would be “selling a substantial part of our Science & Technology ebooks through Google eBooks.” Ammy Vogtlander, Elsevier vice president web strategy and business development, believes Google will help them add significantly “to the reach and accessibility of our content.” Other major publishers are expected to follow suit.

Tom Turvey, Google’s director for strategic partnerships notes that eBookstore is “part of our effort to bring greater choice and access to the ebooks experience through partnership, providing the kind of retail diversity that customers want. It’s important that the book business have this open diversity of retail points, just like it does in print.”

The openness of these newer distribution and reading platforms does represent a clear challenge to library distributors, such as NetLibrary, ebrary, and EBL (E-Book Library). These dealers, some with very poor interfaces, will face major challenges if Google develops a distribution system that meets the needs of libraries. Many libraries already use Google for a host of services and products (from Google Scholar and Books to such apps as gmail and gdocs).

Amazon Quickly Answers the Challenge

Two months ago, Amazon added the feature of previewing books on web browsers. The day after Google’s eBookstore launch, Amazon announced two significant enhancements to its Kindle. Kindle for the Web will enable users to read full books in a web browser. “Anyone with access to a web browser can discover the seamless and consistent experience that comes with Kindle books,” explained Amazon’s vice president for Kindle content, Russ Grandinetti.

Also announced was the ability for users to buy and read full Kindle versions of books without any registration or installation process. Readers will also be able to read ebooks on multiple devices using a software application process a la Google. “Your reading library, last page read, bookmarks, notes, and highlights are always available to you no matter where you bought your Kindle books or how you choose to read them,” noted Grandinetti. Kindle for the Web is still in beta and a formal release is expected in the coming months.

Amazon’s Windowshop for the Web—joining the existing product for the iPad and expected in early 2011—is described as “an immersive way to discover what’s new and bestselling in the world of media.” If your website is connected to the Amazon Associate Program, you will earn referrals on any Kindle books sold through the widget. According to the Amazon.com media announcement, the new Kindle for Web widget “will support Chrome OS devices, including the new Chrome OS Notebook, as well as the Chrome browser and other web browsers.” Although Amazon is hardly planning to cede ebook market share to Google, it sees the need to make Kindle for the Web as Chrome-friendly as possible as the ebook marketplace moves into high gear.

Authors, online retailers, publishers, and independent bookstores will be able to link their websites to Kindle for Web in order to sell books and reach their targeted audiences through Amazon’s Associates Program. Amazon is also sharing a percentage of ebook sales to the more than 100 independent booksellers that have signed up to sell Amazon titles from their websites.

Let the Battle Begin

A battle of giants is afoot. Google has deep pockets, a huge inventory of more than 3 million books, and strong, global market presence. Amazon, on the other hand, has worked hard to develop its publisher relationships, pre-eminence in online book retailing, and dominates in the ereader market today.

So what’s a Barnes and Noble or Borders to do? Rumors have been circulating for weeks that the two online/brick-and-mortar booksellers are considering a merger. However, Amazon alone is valued at about forty times the size of Barnes and Noble and Borders combined, leading many to question whether true competition for ebook dominance has already been pared down to the two giants.

In June 2010, Amazon sold 180 ebooks for every 100 hardcover books; far behind paperback sales, but still impressive. Ereaders continue to proliferate as people turn to PDAs and other mobile devices for many reading applications. With the development of platform-neutral ebook services that cover the web, tablets as well as dedicated readers and mobile devices, the groundwork appears to be set to see ebooks take off rapidly in the coming year.

Google’s Footprint & Imprimatur

With the Google eBookstore, the ebook industry has turned an important corner in reinventing book publishing for the 21^st century. Google’s work in digitization, cloud computing, and search—combined with its deep pockets to support such ventures—make the eBookstore all the more substantial. Google has worked to create, as much as possible at this juncture, a standards-based, agnostic platform; creating an inclusive system that moves ebooks from a niche into the mainstream. Google has integrated existing, indie, and local booksellers into the structure as well. These indies face perhaps the biggest challenge—differentiating their product in this mix, while finding a pricing model that will guarantee their future existence in a market now clearly controlled by corporate giants.

In April 2010, Goldman Sachs estimated that ebooks will represent 12.8% of all book sales by 2015. More realistic figures from Forrester find an even brighter future. “7% of US online adults read ebooks today—many of them without ereaders,” explains McQuivey. “[T]his small, energetic group will grow so rapidly that it will easily spend nearly $3 billion on ebooks in 2015.” Even this figure may be underrating the potential growth for this industry that now has established standards (EPUB), a strong and growing core market, significant financially-strong core companies, and a product that is a clear fit with technological advancements—information and reading anytime, anywhere, on the device of your choosing for a price less than their print alternatives.

Goldman Sachs analysts see Google’s entry as adding competition into the ebook marketplace, noting their prediction that: “Amazon’s share of ebook sales halving from 60%-plus in 2010 to 30% in 2015, partly due to competition from Google.” However, Amazon has an advantage, notes Goldman Sachs’ James Mitchell, given Amazon's ability to sell both print and ebook versions of titles and Google’s need to build up relationships with publishers to develop competitive pricing. In any case, Google is clearly bringing ebooks into the mainstream, with products and a business model that moves these products from niche, dedicated devices to the very epicenter of today’s consumer electronics marketplace.