Google eBooks: Marrying New Technology with an Old Business Approach
Most people classify Google (GOOG) as a company that uses technology to find new ways to do business. But with the announcement of its eBookstore, the search giant has used technology in a way that, if successful, will actually support an older approach to publishing that could give it an advantage over such revolutionary competitors as Apple (AAPL) and Amazon (AMZN).
My BNET colleague Lydia Dishman thinks that the Google initiative could cannibalize sales from independent booksellers:
Right now, a brick-and-mortar store is in direct competition with Google itself as the company is acting as both wholesaler and merchant. If a customer starts by browsing within Google ebook's site, they are only a click away from Google Checkout. Registration is required, but once complete, the transaction lines Google's pockets â€"- not the independent bookseller's.She is correct. Then again, people who go online for an ebook have been lost as customers to local stores, which haven't had the resources to create their own systems. According to the Google press release, independent bookstores would get commission on the sales that happen through their own web site. If anything, the arrangement is likely to provide more sales to the stores than they otherwise might have seen.
Google has managed a version of open access to information that supports the existing industry, rather than overturning it. What is remarkable about the Google effort is the strength of its effective refutation of ebook selling as currently practiced, which has come to include the following:
- Retailers effectively replace publishers because they set too many details of relationships with publishers.
- The retailer pushes for what might do it the most good in the short term, not what would allow the relationship to exist in a healthy way over the long term.
- The retailer sells a format of ebook that works on its own device, as it sets the groundwork to become the inevitable single source for the consumer.
And so, Google is fine with independent bookstores getting business, or with consumers using any device they want to read the ebooks, or with publishers keeping prices higher than what an Amazon (AMZN) or Apple seems comfortable with. In that sense, Google is supporting a less centralized way of selling books, even as it wants to become a centralized fulfillment center.
The irony is rich, given how contentious its scanning of in-print books for search became. Publishers and authors were rightly concerned with a for-profit entity creating a new use for books under copyright -- scanning them for search and even display -- without bothering to involve them.
Google showed one of the characteristics often associated with high tech: ask for forgiveness rather than permission. Although there's been an assumption among managers that the strategy results in gaining more ground, recently we've seen the opposite.
Regulators are looking at Google, Facebook, Yahoo, Microsoft, and others over online marketing and use of consumer data. Google is under direct legal attack from Oracle over its use of Java in Android and indirectly through suits lodged against handset vendors that use the mobile operating system. SAP is on the hook for a whopping $1.4 billion judgment over its use of Oracle's software.
However, in the case of ebooks, Google may have found a balance. Its eBookstore is late to the game, but that is likely a good sign in this case. The company worked out arrangements with an entire industry and is operating in a way that it gets broad support for virtually everyone -- except such big competitors as Apple and Amazon.
Related:
- Publishers Screw Themselves Over Strategy and Consumer Navigation
- Courts Nix Reselling Digital Content -- It Really Isn't Yours
- Look Out Amazon and Apple, Barnes & Noble Has 7 Steps to E-Rule
- Seth Godin: A Canary in the Coal Mine for Publishers and Book Retailers
- E-Publishing Is Doing Well. Publishers? Not So Much