Barnes & Noble unveils largest ebookstore

July 21, 2009: 8:00 AM ET

Book retailer partners with Plastic Logic and Google to take on rival Amazon.

The world's largest bookseller has taken the wraps off the world's largest e-bookstore. Barnes & Noble (BN) announced yesterday the availability of more than 700,000 digital e-books, along with free e-reader software for the iPhone, BlackBerry, Mac and PC platforms. "It's a unique every-device strategy," said William Lynch, president of BN.com in a conference call.

The strategy is clearly aimed at Amazon.com (AMZN) and its popular Kindle e-reader, which I wrote about recently here, as well as the eReader from Sony (SNE). Like Amazon, BN is offering many new releases and best-sellers for $9.99. Unlike Amazon, Barnes & Noble will also allow users to download nearly a half-million public-domain books for free, courtesy of a partnership with Google (GOOG).

As part of the announcement, Barnes & Noble also revealed an exclusive agreement to provide ebooks for the widely anticipated Plastic Logic e-reader, an 8.5 x 11 device that's scheduled for release early next year. (Plastic Logic uses technology developed by E Ink of Cambridge, Mass.) The deal started to come together in the spring after Barnes & Noble acquired e-book platform Fiction Wise, which had been working with Plastic Logic to develop an e-book store.

Plastic Logic vice president of business development Daren Benzi says his device is geared for business travelers, and as such will support the display of PDF files, Microsoft's (MSFT) MS Word, Powerpoint, and Excel, as well as newspapers and magazines. But ebooks are a big part of the game plan. "Will we carry every single one of those 700,000-plus titles? I don't know. We'll announce that as we get further along," Benzi. "But we will have access to them all."

Barnes & Noble first entered the e-book business in 2001, but as Barnes & Noble's Lynch and Amazon CEO Jeff Bezos both now acknowledge, nobody was buying. Lately, however consumer attitudes have changed, due in large part to bigger screens and increasingly mobile lifestyles. Wholesale ebook revenue exceeded $25 million in the first quarter of this year, compared to $7.5 million in Q1 2008, according to the International Digital Publishing Forum. "We see a number of [positive] indicators coming together," says Benzi. "One of the factors is the Kindle; and Sony has experienced significant growth as well. But over and above that, the content providers are embracing new technology and new business models. Even some of the media companies are talking about investing in their own device. All the pieces are there to make this a vibrant and exciting market."

The book industry seems to agree, and certainly welcomes a healthy competition among device makers. "I'm all in favor of seeing more e-books on more screens," says Tim Sullivan, executive editor of Basic Books, a New York-based publisher. "And I'm pretty sure that an open format - which is what it sounds like Barnes & Noble is going to offer - will be disruptive to both Amazon and Sony,"

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Jeffery O'Brien
Jeffery O'Brien

Jeffrey O'Brien joined the San Francisco bureau of FORTUNE in June 2006 as a senior editor covering the intersection of science, technology, culture, and business. From 1999-2006, he was a senior editor at Wired magazine. As a writer, his work has been anthologized in The Best of Technology Writing 2007 and in The Best Science and Nature Writing 2005. As an editor, his features have been featured in The Best American Science Writing 2006, The Best American Science and Nature Writing 2006, and The Best Technology Writing 2006. He is also the recipient of a Jesse H. Neal Award for editing best single issue, which he earned in 1998 as the editor of Marketing Computers (Adweek). O'Brien is a graduate of the SI Newhouse School of Public Communications at Syracuse University and was a 2006 Templeton fellow in science & religion at the University of Cambridge (UK).

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