Google’s long awaited e-book-only bookstore, Google eBooks, puts the company in competition with Amazon, Apple and Borders for the burgeoning electronic book market. The move, limited at the start to U.S. customers only, also marks the first real retail venture for the search and online advertising behemoth, if you don’t count the Android app market.

“The fundamental idea is buy anywhere and read anywhere,” said James Crawford, an engineer for Google eBooks, who emphasized that the system makes it easy to read the same book on multiple devices. “The fundamental architecture is cloud-based, and you never wonder where to put your books.”

The company claims that it will have more books in its catalog than any other online bookstore — more than 3 million titles, but only about 200,000 of those are books licensed from publishers. About 2.8 million of the books are books no longer under copyright in the U.S. that Google has scanned from university libraries as part of its controversial Google Books project. Started in 2004, Google Books has scanned millions of books, mostly without permission from copyright holders, making them searchable online.

eBooks is yet another attempt by Google to diversify its money making. That’s key for the company’s long-term health since it derives nearly all its revenue (nearly $5.5 billion in the third quarter of 2010) from online ads, with the majority of that coming from text ads on its own properties.

Using the Find feature to search a Google eBook on the iPad.

Google is seeking to differentiate itself from Amazon and its popular Kindle reader by selling books that can be read on a wide range of devices, ranging from iPhones, iPads, Android-based devices along with computers running Chrome or Safari browsers. Books can also be read on Barnes and Noble’s Nook and Sony’s E Reader, but not Amazon’s Kindle — due to compatibility issues with the Adobe copyright management DRM attached to the e-books, Google said.

Book buyers will have all their books tied to their Google account, and the service will use Google checkout for payment.

Google’s inclusion of scanned books — though only ones in the public domain — from its Books project could rile Amazon, which told a federal court looking into the project that allowing Google to scan and sell millions of out-of-print books whose copyright owners can’t be found gives Google an unfair advantage. That’s despite Google’s offer to let Amazon and other booksellers to resell the orphans as well. The fate of these so-called orphan books remains in the hands of a federal court judge in Manhattan, and are not available in the bookstore launching Monday.

Google is also partnering with independent bookstores, including Powell’s, to let them sell e-books on their website and share in the revenue from the sale. Independent and local bookstores can drop technology from the American Booksellers Association onto their sites to enable them to sell e-books through Google.

Google also hopes to create book-selling widgets that will let books be purchased through its service on any site on the net. It’s starting one such partnership with Goodreads, a leading site for book clubs. Starting Monday, users of that site can click on a book for their reading group straight from Google.

“The idea is that you buy where you are and read on devices you already own,” Crawford said. “We are committed to open structure, and building up a wider and wider retailer network.”

The decentralization of book selling venues is a clever way to take on Amazon.com, which for many is synonymous with online book sales, and iTunes, which is closely tied to Apple’s iPad/iPod/Mac ecosystem and is fighting to become as powerful in digital print sales as it is in digital music.

However, Google eBooks does not yet have an open affiliate program, such as Amazon has, that lets reviewers and website owners insert custom code into a link so that they get a small percentage of every purchase initiated from that link.

The full Google eBook reading screen on an Android mobile phone.

Book readers will be able to switch from reading in a browser (Chrome and Safari only), to their mobile devices (Android and iPhone) to a e-book reader, without losing their place. However, with copy-protected books, there is no cut-and-paste, no printing and no lending or giving a book away.

Readers who travel outside the U.S.’s borders will be able to read books already in their account, unless those books are not out of copyright in the country the reader is visiting. Users can’t purchase books when visiting the store from a non-U.S. IP address, the company said.

All of the nation’s top publishers have signed onto the venture, making the service’s debut far less rocky than Google TV, which was quickly blocked by the websites of the country’s top broadcasters, despite the fact that integrating meant more viewers of online TV episodes that come with unskippable commercials.

All of the largest publishers, except for Random House, are opting for a model where the publishers set the price and Google and other retailers are simply acting as their agents. In this model, publishers and Google/retailers roughly split the price.

Other publishers and Random House are opting for a model where they sell books to Google at a set price and on a schedule of discounts, leaving the retailers free to price the books as they like.

Book prices will range between $1 and $300, since the service will include technical and academic publications, such as books from O’Reilly and university publishers.

Publishers can choose whether or not to lock down their books with DRM. Google also says it will have a strict privacy policy that forbids it from using your book buying habits to advertise to, or profile readers.

Google also seems cognizant that it is under scrutiny from government regulators. Currently, when books in print come up in Google and Google book search results, Google includes links to places to buy them online, including Amazon.com. That behavior won’t change, the company said, but Google eBooks will now be one of the options.

Google hopes to layer on social features into the service in the near-future and says the infrastructure is in place to let people buy both a digital and paper copy of a book in a bundle.

Authors: Ryan Singel

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