Has Google walked away from its eBookstore?

[pocoreader]

This is interesting. From Mobylives, Mellville House Publishing. Google has stopped supporting its eBookstore, apparently because there is not enough money in it. Read the whole piece:

http://www.google.com/url?sa=X&q=htt...qEsN0XNoSeZEwA

[Dulin's Books]

they havent dropped it or walked away. they have basically locked out new retailers and publishers because they are still in the opening stage evaluating it. its the beta phase that everything google goes thru(or is perpetually in). their first phase was rolling it out to the indie retailers so those stores could get up to speed selling ebooks.

[mcrow24]

Well, we will see. They tend to do as Dulin said, roll it out slow then make a big push once the bugs are out.

That said, it has to be a huge money maker for them to bother doing it. So, as soon as it's not worth their time, they'll shut it down.

Keep in mind that eBook business is a deal breaker for B&N and Amazon, they need it now. Google, not so much. B&N and Amazon are attached at the hip to eBooks now, Google isn't.

Not to mention these companies are at very different scales:

B&N: $2b profits
Amazon: $8b Profits
Google: $30b Profits


Considering Amazon has a 65% market share and esitmates $2.5b in eBooks sales next year and B&N as 25%....., that's about $1b for B&N and about $500m for everyone esle to fight over with Kobo taking a large chunk of that.

So, $1b in sales for B&N, is huge. $2.5b for Amazon is great.

For Google the market still needs to expand a lot before they jumping full speed ahead.

[Barty]

I think the only thing google makes money at is search. Everything else is a money losing hobby.

[b0ned0me]

Originally Posted by Barty

I think the only thing google makes money at is search. Everything else is a money losing hobby.

Almost right - their money comes from advertising, not search. But you're right, everything else is just them twiddling around and spending some of their humungous advertising cashpile.

[khalleron]

Huh. I read the article, and all I saw was an assertion without evidence that Google had pulled all its programmers off it.

But since Google requires its programmers to spend 20% of their time doing whatever they want, even if this were true it doesn't seem to really mean anything.

It's just gossip.

[Elfwreck]

Google realized selling ebooks was going to be about .0001% of their annual gazillion dollar profit.

I expect this is the problem. They don't want to run a bookstore, which is a time-intensive fraught-with-complaints industry; they want to license the books they've scanned to libraries and universities and maybe ebook stores. They *really* don't want to play Amazon's game of setting up "also viewed" lists and star ratings (and patrolling them for trolls & spam).

They scanned a bunch of books; they want to sell access to the scans. But the holdup on the lawsuit agreement is a big impediment--they were expecting, by this time, to be able to sell access to everything they've got with automated royalty payments being sent to authors; the leeetle problem of having to actually *negotiate contracts* with every author that's not controlled by one of the handful of client-contracts they've already got, makes it not worth their effort.

They also don't want to deal with proofreading. Their OCR system is among the best available, maybe *the* best--but none of them deal well with varied fonts and scripty italics and tiny, cramped type, and as more customers try to read the free epub versions and find problems, those people are less likely to pay for books from the same store, assuming they'll have the same problems.

Sure, the free 20% time can be used on ebooks. And if a programmer or group of them comes up improvements, they might move forward with this. But I could understand if they don't bother, because what they really wanted to sell is rather massively illegal. They're already in the midst of a whopping lawsuit for which the judge has thrown out the first settlement agreement as being a cozy collusion between Google & some publishers and firmly in violation of several aspects of copyright law.

[SensualPoet]

Originally Posted by mcrow24

Not to mention these companies are at very different scales:

B&N: $2b profits
Amazon: $8b Profits
Google: $30b Profits

Nitpicking? There is a vast difference between profits and sales. Google has lots of profits and lots of sales. Amazon has decent profits (but thin margins) and lots of sales. B&N has tiny profits and modest sales given it has 1340 store locations between its mall and university businesses. Its Q3 EBITDA ("operating profits", the cash you have to reinvest in the business and to pay taxes and dividends) was $170 million -- for the three months ended Jan 29 which includes the important holiday sales. The company is so cash strapped it suspended the quarterly dividend, needing the cash to keep the company afloat. (Necessary evil: it screws the shareholders in the short-term.)

Its modest successes in digital media, and its genuine hit product Nook, is what has attracted John Malone's Liberty Media group to offer to buy out the company for $1 billion provided existing management hangs around. It's a generous offer but, unlike Borders, B&N is merely on the edge of desperate times, not yet consumed by them. To illustrate:

At Jan 29, B&N --
was owed $356 million in uncollected payments
held $1.6 billion in inventory
... which is about $2 billion in current assets
But it also owed $1.2 billion to suppliers
and held a further $790 billion in accrued liabilities
... which is about $2 billion in current debt

B&N has very little "profit" to work with to transform itself and avoid the Borders fiasco. But ... that's not the same as saying it's hopeless, especially with a new serious investor in the wings and one that might bring strategic synergies (as opposed to investment hedge vultures who seek to grab any existing value and spit out the remains as quickly as possible).

[SensualPoet]

Originally Posted by khalleron

Huh. I read the article, and all I saw was an assertion without evidence that Google had pulled all its programmers off it.

... It's just gossip.

True enough ... since on Monday Google issued a press release supporting the program. See: http://booksearch.blogspot.com/2011/...n-and-now.html

Scott Dougall is the director of product management for Google Books and Publisher's Weekly reported from the BEA conference this week:

Though there wasn’t too much Dougall could say about the future of Google eBooks, he did report that the international rollout will kick into high gear this year, with the ultimate goal of making Google eBooks available in 100 countries. Cagily, he [Dougall] answered an audience question about a possible Netflix-style book-rental system by saying, “We haven’t announced anything like that. Yet.”

You can read more here: http://www.publishersweekly.com/pw/b...and-facts.html

That doesn't sound like Google is walking away from the product any time soon.

But it's also true that Google tries lots of things and does drop them after a time if they can't figure out a way to monetize the service. The latest casualty is Google newspaper archive scanning / search service which was closed this month. Google spent a lot of effort in that space, including buying out dedicated business competitors, but, you know ... if you are a product manager at Google you need to generate revenue eventually ... that's why you are there.

And lastly, Google pushed Eric Schmidt aside as leader earlier this year and that usually means ALL projects will receive fresh scrutiny as a company attempts to reorient itself after major changes at the top. So ... Google eBooks is certainly being eyed afresh.

[bwaldron]

Originally Posted by Elfwreck

I expect this is the problem. They don't want to run a bookstore, which is a time-intensive fraught-with-complaints industry

I agree. Google hasn't done well in any niche where they have had to provide real "live" customer service.

[SensualPoet]

Human interest note: Scott Dougall hails from Thunder Bay, Ontario. There was a profile of him (and Google Books) in the local press there in December. Another Canadian ... !

http://www.tbnewswatch.com/news/1237...oogle-project-