Google eBooks is a big threat to Amazon.
Let the new chapters in the e-book wars begin. And this time, market leader Amazon.com could take it on the chin.
Amazon, which helped popularize e-books with its Kindle reader, was more than holding its own in competition with Barnes & Noble, Apple and Sony. But now it must go up against Google.
Google (GOOG), which dominates online search and has become a major player in smartphones with its Android platform, is taking on Amazon (AMZN) with its Google eBooks.
Google is not offering a dedicated reader. Rather, the Google eBookstore that launched Monday offers titles that can be read on a multitude of devices, from smartphones and tablets to e-readers and laptops — every major one except the Kindle.
“This is a big threat to Amazon,” says Allen Weiner, an analyst at researcher Gartner.
While Kindle is the top-selling e-book reader, its penetration is dwarfed by the number of Android phones in use alone — about 40 million this year, according to investment firm Piper Jaffray.
Combine that with next year’s shipments of Android phones and tablets, as well as the iPhone/iPad universe of more than 100 million devices, and “This is a critical juncture for Amazon,” says Weiner.
Why enter the e-book business now? “You could say we’re late, or that the timing is just right,” says Scott Dougall, Google’s director of product management for Google eBooks. “The fact is, e-books are just starting to take off, and we want to make books more accessible.”
Amazon will sell an estimated $248 million in digital books this year, according to a projection by Credit Suisse Group, and it holds a 72% share of digital book sales.
But that could drop to 35% by 2015, estimates Credit Suisse, because of competition from Apple and Google.
The idea of the Kindle so far has been that consumers buy books for the device, which uses a proprietary Amazon system, and take their Kindle with them wherever they go.
Google’s concept is that in the world of smartphones, tablet computers and laptops, consumers may start their day with a chapter on a laptop, continue to read on their commute with a smartphone, and perhaps end the day reading on an iPad. A reader’s Google e-book is stored in the Internet cloud and will pick up at the page where she left off.
An Amazon statement Monday, however, indicated it may already have countermoves in the works to broaden its base. It said that, like Google, it plans to offer Kindle e-books for other devices and on the Web.
“Stay tuned,” the statement said.
Open for business
The Google eBookstore, in the works for several years, opened for business at 10 a.m. ET Monday, with more than 3 million books available. It has arrangements with most of the major book publishers, so it will have a full selection of best sellers.
It also offers an alliance with independent bookstores that will for the first time allow them to sell Google e-books on their store sites and share the proceeds.
“With Amazon and Apple, we couldn’t do it — it was a proprietary, closed system,” says Michael Tucker, president of the American Booksellers Association. “Now we can.”
Maybe soon, even with Amazon, whose Monday statement said it has plans to allow independent bookstores to sell Kindle books, too.
The books on display at the Google eBookstore looked, at first glance, to be priced almost identically to Amazon and Barnes & Noble e-books, with a few exceptions. Cross Fire by James Patterson, for example, is $14.99 at Google’s store, compared with $12.99 at Amazon and Barnes & Noble.
Most popular books are $9.99 to $12.99.
Some scientific texts are considerably more. Coma Science by Steven Laureys, Nicholas Schiff and Adrian Owen is $208, while Geological Atlas of Africa by Thomas Schlüter and Martin H. Trauth is $191.
On the flipside, Google says it has 2.8 million free public domain books available on Google eBooks, including the Charles Dickens classics featured by Oprah Winfrey in her Oprah’s Book Club: A Tale of Two Cities and Great Expectations. Penguin just released a double volume of the titles, which Amazon sells for $7.99.
The double release wasn’t found Monday on Google, but the individual e-books were free. Amazon, which says it has 1.8 million public domain titles available for free, also offered a no-cost edition of Great Expectations on Monday, while A Tale of Two Cities was for sale at varying prices, starting at $1.60.
Google says its eBookstore has the largest collection of e-books online, thanks to its ongoing project of scanning out-of-print books that will eventually make up a large chunk of its online library.
The scanning project began in 2004 and became a contention, and litigation, with authors and publishers over compensation for scans of their old works. A settlement was reached in 2008, and a hearing was held on the deal, but final resolution awaits judgment by a federal judge in New York.
If the settlement is approved, says Dougall, the full library of scanned books and those scanned in the future will go into the Google eBookstore inventory.
Gene Munster, an analyst at Piper Jaffray, says that despite Google’s muscle, it will have a hard time convincing consumers that Google is now the place to buy books.
“Amazon started with books and is known for books,” he says. “Apple is known for music and entertainment, and Google for search. Just because Google enters a market doesn’t make it a winner.”
Amazon has yet to release sales stats on the Kindle, but Richard Doherty, an analyst at The Envisioneering Group, estimates sales of 3 million to 4 million, compared with 9 million iPads, 50 million iPhones, 2 million Sony Readers and 400,000 Barnes & Noble Nooks. Unlike with Kindle, the Google eBook offerings are compatible with the Nook and Sony e-book readers, as well as with the Apple products.
The Google store will make Amazon, Apple, Sony and Barnes & Noble try harder, Doherty says. “Consumers win.”
For years, e-books languished until Amazon introduced Kindle, offering a low-cost device (starting at $139) that made it easy to read e-books.
In July, Amazon said sales of e-books passed hardcovers. In a July interview with USA TODAY, Amazon CEO Jeff Bezos predicted that e-books would outsell paperbacks — the publishing industry’s volume product — “in the next nine to 12 months.”
“It stuns me,” he said. “People forget that Kindle is only 33 months old.”
Via USA Today