Google Is Said to Be Opening E-Book Store Next Year, Taking On Amazon.com

Google Inc., stepping up competition with Amazon.com Inc., will open an online store for electronic versions of books in the U.S. this year and internationally in 2011, according to a person familiar with the company’s plans.

The Mountain View, California-based company is working with book publishers to sell hundreds of thousands of e-books, said the person, who asked not to be identified because details of the project haven’t been made public.

Google aims to use its position as the world’s most popular search engine to erode Amazon’s dominance of e-books, while Apple Inc. harnesses the iPad tablet and iTunes online store to make its own inroads. The competition means Amazon’s share of digital books will decline to 35 percent over the next five years from 90 percent in early 2010, New York-based analysts at Credit Suisse Group AG estimated in February.

With Google’s effort, each publisher is negotiating different revenue-sharing arrangements, though all of them will keep the majority of the money from each sale, the person said.

Michael Kirkland, a spokesman for Google, confirmed the company’s plan to start an online bookstore this year. He declined to comment further about the project.

Google Books, a separate initiative to scan books and offer publishers ways to sell them online, has been held up in court until a settlement with publishers is approved.

Unfair Advantage?

An accord between Google, the Authors Guild, and other authors and publishers would resolve a 2005 lawsuit that claimed Google infringed copyrights by making digital copies of books without permission. In February, the U.S. Justice Department recommended altering the agreement. The agency argues that Google will gain an advantage over competitors.

Amazon.com, Microsoft Corp., AT&T Inc., and the governments of Germany and France also objected to the agreement, saying it would give Google unfair control over digitized works.

Google rose $12.06, or 2.2 percent, to $567.77 at 9:36 a.m. New York time on the Nasdaq Stock Market. The shares had declined 10 percent this year before today.

The Wall Street Journal reported on the e-book store yesterday.

To contact the reporter on this story: Douglas MacMillan in San Francisco at dmacmillan3@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net.

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