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It has been widely speculated that Google’s Book Search project would become the gateway to a much larger vision that the search company had in mind all along. By going public with their intent to offer an e-book service, Google has dropped the other shoe regarding its efforts to digitize book content.

You knew it was just a matter of time before Google came clean with plans to monetize its book search service. Rather than an ad-driven model, the company has decided to go the retail route with its e-book plans.

Google has experienced much success in finding ways to monetize traffic and content; there’s no denying this fact. However, venturing into the realm of digital books might prove to be a bit more challenging for the search giant.

Catherine Holahan of Business Week has some excellent insight into the potential hurdles facing Google as they attempt this venture:

Several factors are holding back growth of digital books. One is the way they are consumed. Several companies, such as Sony, have recently launched portable devices for reading books and accompanying digital book download services (see, 12/29/05, “Curling Up with a Good E-Book“).

About 11,000 titles are available for download onto the Sony Reader, introduced at the end of September, a Sony spokeswoman says. However, the devices have yet to take off, says Pat Schroeder, AAP’s chief executive officer. “At this point consumers have not found something that they felt was a really good substitute [for the book],” says Schroeder. As another publishing insider puts it, “We haven’t yet had the iPod device of the book.”

Another obstacle has been the book industry itself, which has been reluctant to release entire catalogs for download in part because of concerns over how such distribution will affect the bottom line and copyright protections. On Sept. 20, the Authors Guild filed a class action against Google for its plans to scan books in their entirety.

The McGraw-Hill Cos. (MHP; owner of, Pearson Education (PSO), Simon & Schuster, Penguin Group, and John Wiley & Sons (JW.A) brought their own suit against the search engine for its online book plans (see, 4/24/06, “Ganging Up on Google“).

It really isn’t challenging. There is a market for e-books. But you have to approach it correctly.

Google isn’t going to sell a 100,000 copies of the latest best seller without the publisher’s permission. You can’t just take books and scan them in hopes of making money on them. Authors and publishers have rights and, as Napster learned, you can’t just snap it up and sell it without getting them in on the action. Offer the producers and the owners some of the profits and it’s possible to get their blessing.

Which brings me to my next point. Internet marketers who are making money on their e-books online are doing so through partnerships and joint ventures. Google should do the same. By enlisting traditional publishers as partners and offering to sell popular e-books through JV arrangements, Google could become a major player. With its name recognition, the company could invite e-book authors and publishers to voluntarily offer their e-books through Google in exchange for search engine rankings.

Here’s how that could work. A webmaster authors a book and lists it in Google’s database with a description and image of its cover. Browsers of the e-books click on the listing to visit the marketer’s website. The marketer is then charged a fee in a pay-per-click fashion.

Another way is to charge marketers a monthly fee for a web page that markets their e-book, much the way eBay does with its products. Or Google could offer such pages for free and charge authors a percentage for books that sell through such pages. Internet marketers would then put up their own websites as well as sell through Google. Some of them might even opt to use Google entirely due to its free web page benefit and send all PPC traffic to that site.

In order for Google to enterprise and monetize e-books, it will have to play the game like everyone else. It can’t create the wheel the way it did with searches. We’re too far down the e-book publishing path for that.

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