Google Challenges Amazon, Apple in eReader Market

SAN FRANCISCO, Dec 6 (Reuters) – Google Inc (NASDAQ:GOOG) began selling digital books on Monday, intensifying the search engine’s competition with Amazon.com Inc (NASDAQ:AMZN) and Apple Inc (NASDAQ:AAPL) and marking a significant push by the company to expand into the e-commerce business.

The new online bookstore, dubbed Google eBooks, features 3 million titles, from newly released best-sellers to freely available out-of-copyright books, which consumers can store in a personal online library managed by Google and then read on any device.

"All of your library is there at anytime; any device you pick up, all your books are present," James Crawford, the director of engineering on the Google Books team, told Reuters in an interview ahead of Monday’s announcement.

The electronic books market is currently dominated by Amazon.com, which helped establish the market with the release of its Kindle reading device in 2007 and has a roughly two-thirds share of the U.S. market, according to Forrester Research. Earlier this year, Apple entered the market, selling electronic versions of books that can be read on its popular iPad tablet PC.

Google has an opportunity to offer electronic books to a vast segment of consumers who might not have been aware of electronic books, said Forrester Research analyst James McQuivey. But he noted Google would have a better chance of unseating Barnes and Noble in the No. 2 spot selling digital books, than Amazon.

"The Kindle brand is solid and their devices are super-elegant, very cheap now, and their bookstore is second to none as far as bookstores go," McQuivey said.

Google said its digital books are compatible with a number of reading devices, including the Barnes and Noble Nook and Sony e-reader, but are not compatible with the Kindle (save for titles in the public domain that do not rely on special digital rights management technology).

Google, whose Internet search algorithm has made it the world’s most popular search engine, has created a special algorithm to help it set the optimal price for its electronic books, said Crawford.

"Our pricing strategy is to be competitive," relative to other electronic book offerings, said Crawford.

But, he noted: "We did not come into this and decide we’re going to capture market share by undercutting price."