Google joins the growing e-book club

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The e-book market is heating up with two recent developments. Google Inc. recently announced plans to launch a program that will allow consumers to purchase access to digital versions of books via any Web-enabled computer, e-reader or mobile phone. And, around the same time, Taiwanese company Prime View International (PVI) signed a definitive agreement to acquire E Ink Corp., which manufactures many of the e-reader displays used today, for $215 million.

Google's announcement puts it in competition with Amazon, which sells e-books specifically formatted to work with its proprietary Kindle.

“We've consistently maintained that we're committed to helping our partners find more ways to make their books accessible and available for purchase,” said Google spokesperson Gabriel Sticker, via e-mail. “By end of this year, we hope to give publisher partners an additional way to sell their books by allowing users to purchase access to Partner Program books online. We want to build and support a digital book ecosystem to allow our partner publishers to make their books available for purchase from any Web-enabled device.”

In a new report titled How Big Is the Reader Opportunity, research firm Forrester estimates that combined US sales for Amazon Kindle and Sony Reader digital books were $1 million in 2008. In comparison, US consumers spent $5.1 billion buying books online in 2008.

The report suggests, however, that US consumers are ready to embrace e-readers in a more significant way going forward for a variety of reasons. For one, e-commerce savvy consumers appreciate the ability to shop, pay and receive delivery on e-books all in one step. In addition, as the technology continues to improve with lighter devices and more content becomes available, the attractiveness of these devices is growing.

The Kindle DX, for example, is bigger than previous versions, making it better for reading content such as newspapers, periodicals, textbooks and business documents. It is priced at $489 and will be available this summer.

Bringing together PVI, which has focused on electronic paper display technology for the past four years, and E Ink will enable the two companies to better take advantage of the category's growth, according to a statement. E Ink sales were $18 million in the first quarter of 2009, up 157% over the same quarter in 2008.

“Combining E Ink and PVI creates a single public company that is dedicated to electronic paper,” said Russ Wilcox, co-founder, president and CEO of E Ink, in a statement. “With a common ownership structure, we can get closer to customers around the world, streamline the supply chain, and speed up new product development.”

The E Ink transaction is expected to close in the fourth quarter of 2009. It will remain headquartered in Cambridge, MA.
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