Google's eBook Pricing Model

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Google has introduced an eBook store with 3 million titles which can be read on iPhones, Android-based phones, PCs, Sony's eReader and Barnes and Noble's Nook, but not on Amazon's Kindle.

For many best-seller titles, he added, pricing is set by the publishers, to whom Google will in most cases pay 70 percent of the list price for each sale. For so-called non-agency books sold on Google's site, in which Google sets the price itself, Google will pay publishers 52 percent of the sale price.

Google said it also has partnership with independent booksellers who will sell the titles on their own websites.

While Google's experience in e-commerce is limited, some analysts believe that the transactional revenue from selling electronic books may be less important to Google than the breadth of online services it will be able to provide by offering books.

"I think it's kind of critical for Google to make sure they're providing as much that keeps users engaged and on Google as possible," said Evercore Partners analyst Ken Sena, whose comments were based on earlier reports about Google's electronic book plans, which lacked some of the details of Monday's announcement.

The introduction of the eBooks store comes several years after Google began an ambitious and controversial project to scan millions of library books, which resulted in litigation over orphan works, essentially books whose copyright owner is unclear.

The new bookstore is based on in-copyright titles for which Google struck partnerships with publishers, as well as out-of-copyright books now in the public domain.

Google will offer special software for consumers to read the books on their laptop PCs, as well as on smartphones such as the Apple iPhone and devices based on Google's Android software. Consumers will need to use Google's Checkout payment service to purchase books at Google's bookstore.

Forrester Research's McQuivey said Google could eventually generate advertising revenue from electronic books.

"By insisting on a cloud-based model ... they're basically positioned very well to go to an ad model," said McQuivey. "Every page that turns is pulled from a server and that way Google can sell targeted ads." (Reporting by Alexei Oreskovic, with additional reporting by Diane Bartz; editing by Andre Grenon)