Google's Colonization of E-Book Devices Continues Apace
It was Google's first e-book partnership with a company based outside the U.S. (although the $249 Cool-er e-reader has been available here since May). But it was hardly Google's first e-book flag-planting. Why is that important if Google is only giving the books away anyway? Because it doesn't plan to always be giving books away for free.
Planting the Free Flag Google announced a similar deal with Sony last month, to bring its library of public-domain e-books to Sony's (SNE) new Reader. In July, it partnered with Barnes & Noble (BKS) to make the free collection available through B&N's relaunched eBookstore. The Barnes & Noble deal also plants Google's free e-books API (application programming interface) on Plastic Logic's e-book reader, which is slated to launch early next year and will feature an exclusive e-book sourcing deal with B&N.
Google, in fact, seems bent on planting its API on as many non-Kindle e-book readers as possible, which is not good news for Amazon.com (AMZN).
Apart from providing ammunition to potential Kindle-killers, the spread of Google's million-title-strong library across non-Kindle devices seems designed to encourage consumers to see their e-book reader as yet another device for accessing free stuff from the Internet. Google has also embraced the open ePub standard for distributing its free e-books, which Sony and Interead support but Amazon does not. Over time, that can only erode the perceived value of Amazon's Kindle service. At the same time, Google's library of free books serves as a kind of Trojan horse to get its e-book API onto as many devices as possible.
The Paid Plan It's all part of a grander plan. Google announced in June that it will launch an e-book e-commerce platform by the end of 2009 that will allow publishers to sell e-books directly to consumers. While Google will take a commission on the sales, it will be nothing like the 70% cut Amazon claims on the sale of Kindle books.
In order to make its platform attractive to publishers, Google needs to have access to as many devices as possible. Colonizing those devices now with "free" is a way to build out the platform and train consumers to look to Google for e-books.
The real pay-off for Google, though, will come if its settlement agreement with publishers in the Google Book Search case is ultimately approved by the court. Under the terms of that proposed agreement (which is being opposed by everyone from Amazon to the German government, Google would be given a blanket license to digitize and sell so-called "orphan works"—books that are still under copyright but whose rights owners are either unknown or cannot be located. Monies from the sales of those titles—minus Google's take—would be held in escrow by a new collection society called the Book Rights Registry to be disbursed to the rights owners should they ever turn up. Because the settlement stems from private litigation, however, Google alone would be able to rely on its blanket license. Anyone else—including and particularly Amazon—would either have to negotiate individually for those rights (not so easy when the rights owner is unknown) or risk litigation should the rights owner ever show up.
There have been millions of such books published over the decades from U.S. publishers alone. Google's effectively exclusive license to exploit that vast library commercially could be an enormous competitive advantage over other e-book providers, including Amazon.
A decision from the court on whether to approve the terms of the deal is expected before the end of this year. Is it any wonder that Google is anxious to get its API onto as many devices as possible before that happens?
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