SEATTLE - Software giant Microsoft and top online retailer Amazon.com on Monday said they are teaming up to sell digital books in the latest boost to the electronic alternative to paper and ink.
The deal will give Amazon a custom version of Microsoft's Reader software for downloading and displaying text on a personal computer or handheld device, the companies said.
That is a major step by Amazon, the No. 1 Internet bookseller, toward opening a digital bookstore and making its debut in the nascent industry.
The Seattle-based company would launch such a store in the future and was busy lining up thousands of titles for the grand opening, Lyn Blake, general manager of Amazon's book division, said in an interview.
Microsoft believes deals like the one with Amazon will convince publishers to roll out digital books quickly. In fact, the company thinks 100,000 titles could be for sale by the end of next year.
"We think its very important to ramp up very quickly the number of titles so e-books aren't seen as sort of a toy or niche," said Dick Brass, vice president of technology development at Microsoft.
"It's important to go to publishers and evangelise the importance of e-books and the opportunities that exist," Brass said in a telephone interview from San Francisco where the announcement was made.
It is the latest such deal for Microsoft, which earlier this month partnered with Amazon rival Barnesandnoble.com to kick off the first major online store selling digital books.
Financial terms of the latest transaction were not disclosed, but Brass said Microsoft would collect a "very small" single-digit royalty from Amazon for each book sold using its software, which is given away for free.
Shares of Microsoft were unchanged at US$70-5/8 while those of Amazon reversed earlier gains to fall US$1-1/8 to US$38-13/16.
Although digital book sales make up only a minute fraction of the industry total, they have built momentum in recent months as high-profile authors like horror writer Stephen King start making some works available online.
Brass cited analyst reports that estimated digital book sales could reach $3 billion a year by the end of 2005, accounting for 10 percent of total book revenues.
"We certainly think that's possible," Brass said.
Microsoft has made a high-profile push of its Reader software, which uses its "ClearType" technology to make letters on a computer screen much sharper than usual, relieving strain on the eyes and making text easier to read.
The software also lets users bookmark their place in a text, highlight portions of a book, or make notes.
In other e-book news that showed Microsoft and Amazon rivals weren't standing still, Adobe Systems, the largest maker of Web publishing software, said it was buying Glassbook, a privately held developer of consumer and commercial software for distributing and displaying digital books.
Adobe, which makes the popular Acrobat Reader software for PCs, also said it was expanding its partnership with Barnesandnoble.com to offer more e-book titles using its technology and that of Glassbook.
"By leveraging the personnel and technology strengths of Glassbook, Adobe will continue to develop products and services that give customers an eBook experience that is unsurpassed," Joe Eschbach, vice president of Adobe's ePaper division, said in a statement.
Shares in Adobe rose US$3-13/16 to US$132-11/16 while those of Barnesandnoble.com dipped US$3/16 to US$3-3/4.
