Google Writes New Chapter in E-Book Saga

The Wall Street Journal is reporting that Google will launch its long-awaited Google Editions electronic bookstore sometime this summer. This move, which had been rumored for months, will almost certainly reshape the e-publishing landscape.

To give you an idea of how analysts perceive Google’s impending market entry, a February 2010 Credit Suisse report stated: “We expect Google to be a major competitive factor in the eBook market.” Further, it predicted “a scenario where Apple, Amazon, and Google eventually split the market.” Amazon, according to Credit Suisse, had a 90% share of e-book sales in 2009.

In order to fully gauge the potential impact of a Google e-book store—and even a device, which the company is also rumored to be developing—we need much more information than the company divulged in a May 4 session at Random House’s New York headquarters.

At this point, we know nothing about the pricing, content mix or types of deals Google is making with publishers. Will Google use the “agency” pricing model that Apple is pushing for the iPad, whereby the publisher gets a 70% cut of each sale, with retail prices ranging from $13 to $15 per title? Or will Google follow the earlier Amazon “wholesale” model, where the publisher gets a 35% cut of a baseline price of $10 per title?

Rumor has it that Google prefers the agency model, which is also favored by most publishers, but we don’t know for sure.

Here’s what we do know:

• Google’s offering is browser-based. It’s not tethered to a specific device, which means any title purchased through Google should be readable on an Amazon Kindle, Apple iPad, Sony Reader, Barnes & Noble Nook, or any other e-book reader, laptop, desktop, tablet or mobile device.
• Google Editions will be closely tied to Google book searches.
• Google will allow book retailers to sell Google Editions on their own sites and keep the bulk of the revenue.

Commenting in the Journal, Evan Schnittman, vice president of global business development for Oxford University Press, said: “This levels the retail playing field. [A]s a publisher, what I like is that I won’t have to think about audiences based on devices. This is an electronic product that consumers can get anywhere as long as they have a Google account.”

Schnittman added that Google Editions represents “the ultimate test” of whether the ability to search, find and purchase electronic books will generate substantial revenues for Google as well as participating publishers.

As always, the deciding vote in whether the test succeeds or fails will be cast by the almighty consumer. If Google’s offering is compelling and priced fairly, there’s no reason to think the company couldn’t become a prime mover in the e-book business. On the other hand, this is already a hyper-competitive market thanks to Amazon, Apple, Barnes & Noble, Sony and others. Google will have to thread the needle very carefully to find a place in this crowded field.

Whatever happens, I can’t wait for the next chapter on this one.