Microsoft, Booksellers Form E-Book Venture

Microsoft, Barnes & Noble and Barnesandnoble.com are betting that the technology and the consumer interest are there to move book readers from the printed page to the digital age.

The companies said Thursday that they have formed a partnership, called the eBook Initiative, that will offer thousands of books online in a digital format that can be bought for the price of a paperback and be downloaded using new Microsoft software.

The agreement calls for Microsoft to market its Microsoft Reader e-book software on the Barnesandnoble.com Web site by midyear. Consumers would download the books onto a new line of Pocket PC hand-held devices or, eventually, to their personal computers.

Company officials announced the deal at the Consumer Electronics Show here.

Microsoft Reader is software that will convert books into digital form. Microsoft says its new Clear Type technology will improve the reading experience on-screen by making type more closely resemble printed text. As part of the deal, Barnes & Noble will market and sell e-books and Microsoft’s e-book software in its stores nationwide.

“What we’re striving to produce is the Model T of e-books: the first commercially viable e-book to create a mass market,” said Dick Brass, Microsoft vice president of technology development. Brass said Barnes & Noble’s dominant book retailing presence will make Reader available to tens of millions of consumers in a matter of months.

Microsoft also announced Thursday a partnership with audio computer technology firm Audible.com to provide audio in the Reader software so that people will be able to listen to recorded versions of stories over their hand-held devices.

Company officials declined to disclose how much it would cost consumers to buy an electronic version of a book, but they stressed that the price must be close to what readers now pay for a paperback.

The current market for e-books is less than 1% of the overall book market, according industry figures, and there are only a few companies even producing e-books.

Shares of New York-based Barnes & Noble rose $3.63 to close at $23.19 on the New York Stock Exchange. In Nasdaq trading, New York-based Barnesandnoble.com rose 63 cents to close at $14.81, and Redmond, Wash.-based Microsoft fell $3.81 to close at $110.