Is Google building an eReader? Readying ad-supported books?

The Kindle might be getting a brand new eReader rival.

It seems that Google has bought out a company called eBook Technologies Incorporated. The acquisition is notable for a few reasons –

  1. ETI has two LCD based eReaders and 1 eInk based eReader – the latter looked surprisingly like the BeBook. This might mean that Google is looking at building an eReader. It makes sense to build on one of ETI’s eReaders, instead of starting from scratch.
  2. ETI has 8 very important eReader patents including ones covering advertising in books and secure ebook delivery. These were mostly granted on December 16th, 2010. This might mean that Google already has an eReader ready, and just wants to protect itself from patent lawsuits. Given that Amazon and B&N already have several patents, and that companies like Discovery Communications also have eReader related patents, it makes sense to buy a portfolio of patents that would keep a Google eReader safe from patent lawsuits.
  3. ETI has technology for an eBook platform which includes an ebook publishing and distribution system. This is something Google would definitely need if it were to get into eReaders. In fact, it would need this even if it sticks with just ebooks.

Here are some links of interest –

  1. Cache site for the ETI-Proto – ETI’s 6″ eInk eReader
  2. Cache site for ETI Product Overview – ETI’s eReaders, Online Bookshelf, eBookstore, and Tools
  3. TechCrunch’s Coverage – Some intelligent comments on a rather amateurish post.

However, the real question is – Why did Google buy eBook Technologies Incorporated?

Is Google Building an eReader? Will it build on top of ETI-Proto?

The first possibility is that Google decided that instead of spending $1 billion on B&N’s Nook division, or Sony’s Sony Reader division, it makes more sense to spend $50 million on a smaller company like ETI or Cool-er.

Then it could take the devices ETI has, pick one or more, and build a Google eReader using the technology. As a nice bonus, it gets a bunch of eReader patents that ensure it can release the new Google Reader without any problems.

Will Google go with an eInk eReader or a LCD eReader?

Here are the three ETI eReaders Google could build on (please note that most of this information is from 2007, and is thus pretty outdated) –

  1. ETI-Proto. It has a 6″ eInk screen, a single button, and seems to be a BeBook clone.
  2. ETI-1. It has a back-lit, 8.2 inch, 16 bit color LCD touchscreen with VGA resolution. It has brightness and contrast controls. It also has an internal 56K modem, an ethernet port,  a memory card slot, a Motorola processor, and a stylus.
  3. ETI-2. It has a back-lit, 5.5 inch, 4-bit grayscale LCD touch screen with half-VGA resolution. It has page turn buttons on the front left side. It has an internal 33.6K modem, a USB slot, a stylus, and a Cirrus Logic processor.

It seems ETI had an entire range of eReaders – eInk, grayscale LCD, color LCD. The eReaders also seem pretty decent given these specifications are from 2007.

Given that it’s Google, it’s likely that it will use this technology to build a reading tablet, and not an eReader.

How likely is it that Google is building an eReader or a Reading Tablet?

Very likely.

Google built a phone secretly. Then it built a netbook/laptop secretly. There’s little doubt it’ll build an eReader sooner or later. It has search traffic, it has books, it has public domain books, it has an ebook store, it has cloud infrastructure – the only thing missing is an eReader.

In fact, it’s quite possible that Google has an eReader almost ready – that it’s buying ETI simply for eReader patents.

Is Google buying patents to protect an almost-ready Google eReader? To sell advertising supported books ?

Let’s take a look at the impressive eReader patents ETI has. Thanks to Dave at TechCrunch for the clues.

Patent for advertising in Books

[Advertising in Books] System and Method for providing Sub-Publication Content in an Electronic Device – A patent about showing ‘master content’ and then showing sub-content that might be a book review, news, sports news, classifieds, book-related, and so forth. It includes advertisements as sub-content. This might be the BIG patent. Amazon has a patent for in-book advertising. Now Google just got a patent for in-book advertising.

You can also read the entire eReader patent.

Patent for Secure eBook delivery and offline eBook shopping

From the Management page at ETI’s website we get this –

 John is co-inventor and patent holder of a system to provide secure electronic book delivery. He is also a co-inventor of a patent-pending system to provide offline catalog shopping on an electronic book.

Those are two very important patents. Can’t find the patent numbers. Please do leave a comment if you can find them.

Flexible Electronic Device

Update: This is actually Skiff.

Patent Application Number – 20100315399. This is a patent that covers a flexible electronic device and a method of manufacture. This patent specifically quotes the Kindle and Plastic Logic’s Que –

In many cases, electronic devices have replaced traditional, non-electronic devices.

For example, for many, electronic reading devices have replaced traditional paper books. An example of such a device is Amazon’s Kindle wireless reading device, which allows a user to download an electronic book, and then read that book using the device. Another example of a similar product is the Plastic Logic Reader. These devices, while providing functionality for the user, still resemble small, inflexible computers.

It’s interesting that Skiff has patents for a flexible eReader. Thought that News Corp had closed it down. This might be a pretty valuable patent. Skiff has at least two more eReader related patents –

  1. [This is Skiff] Electronic Display Controller – System for controlling an electronic display, such as an electrophoretic display.
  2. [This is Skiff] System and Method for Providing Spatial and Temporal Content in an Electronic Device. Includes Advertising which makes it a hugely important patent.

It’d be worth investigating what other patents Skiff has. Perhaps in a later post.

Additional Patents

ETI also holds a few additional patents –

  1. Electronic Paper Display Whitespace Utilization – A patent about how ePaper content formatting is presented. It literally talks about figuring out how best to display content on an eReader, and which content to display, given a certain amount of available space left. It’s a bit ridiculous there’s a patent for how words are shown on a page.
  2. System and Method for delivering Publication Content to Reader Devices using Mixed Mode Transmission – A patent that talks about multi-casting content to multiple eReaders. It also talks about using mixed mode transmission.

It’s interesting that nearly all of ETI’s patents mention devices using electronic paper displays. Why would it focus so much on eInk when it had just 1 eInk based eReader?

Is Google buying ETI’s Platform and Distribution Technology?

After looking at the patents ETI has, this possibility seems really unlikely. However, let’s see if there’s something worth acquiring.

ETI has a platform consisting of four parts –

  1. eReaders. Which we’ve looked at above.
  2. Online Bookshelf. This is ETI’s equivalent of WhisperNet/the Cloud. They talk about ‘the ability to purchase and access ebooks anywhere, and at any time’ – which sounds identical to the Kindle’s ‘Buy a Book Once. Read it Everywhere’ sales pitch.
  3. eBookstore. The equivalent of Kindle Store. ETI mentions relationships with over 24 major publishers. It also talks about accessing the store through an eReader, a browser, an offline catalog, or through an alternate web retailer.
  4. Content Conversion and Publication Tools. Apparently, ETI’s founders were founding members of the International Digital Publishing Forum, which created ePub. ETI has a tool, eBook Publisher, which converts books into ePub format. It can process text, ePub, OEBPS, Html, Word, and Powerpoint files. ETI also has a tool, Auto Publisher, which performs pagination, compression, and encryption of ebooks.

It’s clear that ETI’s platform, and its distribution technology and tools, might be pretty valuable too. ETI’s President is on the IPDF board and helps set direction for ePub – which definitely helps since ‘openness’ and ePub are going to be used as weapons in the eReader Wars.

Is Google buying itself an eReader Development Team?

ETI’s management team –

  1. John Rivlin, CEO, was the VP of Software Systems at Softbook Press. SoftBook Press released one of the first eReaders in 1998 – the SoftBook. This company was acquired by GemStar, and he was then responsible for design, development, and operations of the Gemstar eBook server platform.
  2. Garth Conboy, President, was the VP of Software Engineering at Softbook Press. At Gemstar he was the GM for the Gemstar eBook Group which was a combination of SoftBook Press and the company behind the RocketBook.

More details at the cached page for ETI’s Management Team.

By acquiring ETI Inc. Google instantly gets some of the people with the most experience in eReaders and eBooks.

Closing Thoughts

Google acquired – eReader technology, some extremely valuable patents, a distribution system and platform, two people who know an awful lot about eReaders. It’s a pretty good acquisition.

There are two very likely consequences – a Google eReader will arrive in 2011, Google will try advertising-supported books in 2011 or early 2012.

Kindle Store's scariest competitor ever, 3 free religious books

First, for your Kindle, here are a few more free offers –

  1. Jackson Jones, Book 1: The Tale of a Boy, an Elf, and a Very Stinky Fish by Jenn Kelly. Price: $0. Genre: Christian Fiction, Children’s Books. Rated 4.5 stars on 7 reviews. 
  2. Last Light by Terri Blackstock. Price: $0. Genre: Christian Fiction, Inspirational. Rated 4 stars on 48 reviews. 

We also have a free paperback (yes, you read that right) – Alex Detail’s Revolution (Choose Your Destiny) by Darren Campo. Price: $0. Genre: Science Fiction, Adventure. Rated 5 stars on 13 reviews.

Thanks to Mati for the update, and to someone else for the paperback (can’t find who it was now).

Also, a book that was free earlier is free again –  

A Gift of Grace by Amy Clipston. Price: Free. Book Genre: Amish Fiction, Christian Romance. An average of 4 stars across 52 reviews.

Next, let’s look at the Kindle Store’s scariest competitor ever.

Google eBooks is here and it supports almost ever eReader other than Kindle

Thanks to Robert for the update on the new threat to the Kindle Store.

Kindle Store and Amazon have a lot to be concerned about –

  1. 3 million books – Over 2 million of which are free books.
  2. ‘Hundreds of thousands’ of new books for sale.
  3. You can download DRM’ed books and transfer them over to Nook and Sony Reader. This is a big surprise since there was no mention of ePub downloads in the past
  4. Downloads work for a very long list of eReaders including Kobo, iRex, Entourage, BeBook and Bookeen – pretty much anything that allows DRM’ed ePub.
  5. There’s offline reading for people using a smartphone or eReader that’s ‘registered’.
  6. 15 million scanned books – Which might make it to the store eventually.
  7. US only for now – Goes International in early 2011.
  8. Deals with over 4,000 publishers.
  9. You can also read using your computer’s browser or using an Android or iPhone app.
  10. It’s amusing that the first two classics Google would mention are Great Expectations and A Tale of Two Cities – exactly the books Oprah is going to add to her book club and use for her potential Oprah Kindle recommendation.
  11. Good Reads is the one and only affiliate partner at the moment. There will be a program where any site will be able to sell Google Books and get a cut. This is a huge threat as a lot of sites will take this up.
  12. There’s ‘Last Page Read’ syncing across devices.

You can also read the Google Blog entry on Google eBooks and see a video.

The entire ‘all ePub devices ganging up to take on the Kindle’ movement is finally growing some teeth. It’s also interesting that by supporting ePub each of these eReaders effectively blows up its chances of making money from eBooks in the long term. The minute a better ebook store shows up (for example – today) every device that supports ePub just becomes a terminal for the better ebook store.

Kindle Store isn’t under a huge threat yet – ‘hundreds of thousands’ is a very vague and hard to quantify number. However, it might soon be in serious trouble.

eReader, eBook Strategy – What various companies are going for

This is a particularly complicated area to tackle as eReaders and eBooks mean a lot of different things to different companies.

Let’s start by looking at what each of these mean.

What eReaders mean to eReader companies

Let’s start with the obvious things eReaders represent –  

  1. A big source of income including repeat customers for eReaders.
  2. A direct channel to customers. Unpolluted by other companies or by governments (at least for now).
  3. A means to expand into selling more than books. Something that surprisingly few people talk about.
  4. Customer purchase behavior. To get an edge over every other publishing related company.
  5. Customer information for advertisers. So far no company has been doing this which is a relief. At some point iBooks and iAds will intersect.
  6. An easy target – especially if they have to do just a few hardware tweaks to an existing product.
  7. A means to save their business.
  8. A means to keep their monopoly.

Then there are the implications and possibilities if we look 10 to 50 years down the line –

  1. A means to take over all of publishing.
  2. The replacement for paper and an unlimited stream of revenue.
  3. A chance to bring people back to books, democratize publishing, and change the course of literature and books.
  4. The opportunity to propagate a certain world view.
  5. Connecting people to each other and making reading truly social.
  6. A direct, ever-strengthening relationship with the customer.
  7. The opportunity to sell customers more and more of the devices they use. A foothold into their lives and wallets and homes.

eReaders are a lot more than a simple device.

What eBooks mean to eBook companies

eBook companies and Publishers see a lot in books –  

  1. Potentially $23.8 billion a year from the US alone.
  2. Control over books and their impact. Control over authors. 
  3. Influence and the power of being gatekeepers.
  4. A means to find out more about readers.
  5. Customer information to sell to advertisers.
  6. Lower costs and higher profits.
  7. An opportunity to take over a market.
  8. Lots of high quality content that is relatively cheap.

Note that while there is some overlap eReaders offer much richer user data. A Publisher or a bookstore could never figure out the most highlighted passages or which books were read and which were finished.

Things get more interesting when we look 10 to 50 years down the line –

  1. The future of literature and books. 
  2. Unbelievable profitability.
  3. A gold mine that if controlled would pay huge consistent dividends.
  4. Control over a huge part of the world’s source of knowledge.
  5. The chance to completely take over Book sales. To become untouchable.
  6. Lots of good publicity.
  7. A direct link to the bank account of every single library and every single educational institution.
  8. The opportunity to commoditize eReaders.
  9. The opportunity to control the flow of books. Expand that to control the creation of books. Expand it more to control the consumption of books.

eBooks are far more important than other types of content – they still hold value, they can be made very profitable, book readers are devoted enough to bear with Publishers, and books are the keys to a lot of other things (knowledge, libraries, education, public service, brownie points).  

That explains why Amazon, Apple, Google are jumping in

When you consider all the different possibilities and the ridiculous amount of profits that could be generated it makes sense that all these tech giants are jumping in.

Publishers and authors who complain about not being able to make money need to take a hard look at themselves. 

PC makers, Search companies, tire manufacturers, TV makers – everyone is flocking to eBooks and eReaders. Yet you continue to do nothing with all that you have.

We have companies leaving some of the most lucrative opportunities to focus on books. They must see something HUGE for them to turn away from all the exciting new technologies and instead focus on books.

Apple and Google both must see a multi-billion dollar industry – It wouldn’t really be worth their time otherwise. 

Naive and Cynical takes on companies’ eReader and eBook Strategies

For each of the big eReader companies let’s start with the party line, then look at things from a naive perspective, and end with the cynic’s view.

Note that this is just eReaders and eBooks and it doesn’t discuss everything else the company does unless it’s relevant to reading.


The Party Line – It’s an iWhatever you want it to be. It’s a better eReader than dedicated eReaders.

The Naive View – Apple are interested in books. Apple have built the iPad as an ebook reader.

The Cynic’s View – Apple want to put in the least effort and instead use marketing and apps to pretend the iPad is an eReader. Money for nothing and the 30% cut for free.

Quite frankly, it doesn’t really seem like Apple have a strategy beyond talking people into believing that whatever Apple produces is magical. It’s excellent in some ways because they are training Apple users to buy Apple and trust in Apple and love Big Brother killing Big Brother Apple.

In effect Apple see ebooks and ereaders purely as an opportunity to sell iPads and get more people into the Apple way of life. Plus it’s nice to get 30% for ebook sales.


The Party Line – Organize the world’s information. Offer up books for knowledge. Save the world’s libraries.

The Naive View – Google will make all books free. Google will not get into hardware.

The Cynic’s View – Google will sell people ebooks and then also collect their information and sell them other things.

Google are an infinitely dangerous company and eReader and eBook companies have got to be worried about its entry into ebooks.

Google looks at the exploding ebooks market and sees easy pickings. They can get lots of things for free or cheap and sell them for good prices. The ‘open’ strategy Google loves to use also fits in well because we have books and libraries and things like sharing.


The Party Line – We make great eReaders. Think they are supposed to be used to read books.

The Naive View – Sony have a strategy.

The Cynic’s View – Sony is in over its head. The Sony Reader is a very good reader. Perhaps the best. However, Sony as a service is painfully bad and they aren’t building out an ecosystem and will not have much of a role to play in the future of books.

It’s almost a waste of time writing about Sony. Just want to note this down as Sony’s complete and utter lack of intelligent strategy is also a sort of strategy.

Basically, Sony see eReaders as lifeless devices they can sell and then users can figure out the rest.


The Party Line – Every book ever written in any language – in your hands in 60 seconds.

The Naive View – Amazon is transitioning from selling physical books to paper books.

The Cynical View – Amazon are taking over Publishing. They are building a direct channel to customers. They are pretty much taking over control of books.

Amazon think 50 to 100 years down the line. Lots of items that even our lists above don’t capture – Amazon are working for. Basically, Amazon are going to surprise a lot of people with where they take the Kindle and by then those people/companies won’t have a chance.

Barnes & Noble

The Party Line – B&N are books. B&N have big partners (HP, Google) and bright prospects. B&N knows books.

The Naive View – Barnes & Noble have a chance.

The Cynic’s Take – We promise more than any other eReader company. Eventually we deliver. A week later our competitors are ahead again.

B&N is just doing Nook to survive. There isn’t really a long-term vision here. At least not one that’s clear. B&N are in over their heads and in a ton of trouble. Basically, the Nook is a good move made by a company without the resources or the strengths to make it work.

Kobo Books

The Party Line – We’re taking this global.

The Naive View – Kobo doesn’t have a chance.

The Cynic’s Take – Round up a superstar alliance with a few goats (Borders) – that doesn’t mean it’s a win. The Kobo Reader is terrible and there’s no way it can be the foundation for a great win by Kobo.

Kobo are very, very dangerous. They are also very, very late to the contest. See little hope for them unless they do something drastic.

First Mover Advantage and Unexplored Areas

 Instead of wondering which company is going to win or analyzing each company’s chances let’s answer two questions –

  1. What companies have first mover advantage in ebooks and ereaders and reading devices?
  2. What are the unexplored areas?

The first answer is easy – Kindle leads the eReader market, Kindle Store leads ebooks, Apple leads in mobile devices people might read on, Windows leads in devices that can be used for reading, Google leads where people start off looking for books, and Amazon and B&N lead in where people buy books. 

It’s going to be very, very hard to replace one or more of these.

Different areas important to the future of ebooks and eReaders are dominated by different companies. Even Amazon only dominates in a few areas. Any company’s eReader+eBook strategy should factor this in – lots of Giants controlling the different areas and often with insurmountable leads.

To win companies will have to leverage new and unexplored angles and areas.

Changing the eReader and eBook Wars

Here are a few ways to skirt around the incumbents –

  1. Bring in the FTC. Notice how various companies are already doing this to each other. 
  2. Get the Big 6 Publishers that account for 60% of books on your side. 
  3. Get readers on your side. Amazon actually dominates this too.  
  4. Use the illusion of open or embrace actual openness.
  5. Monopolize some amazing new ePaper technology.
  6. Find a way other than ePaper technology to make a much better eReader. Again we see Amazon trying this out with the promise of Kindle Apps. B&N has a shot too if it uses Android well. Apple are using it in the opposite way – taking a non-eReader and turning it into an eReader using apps.
  7. Beat everyone on price. Apple and Publishers destroyed this option for Amazon – the Agency Model is the exact opposite of what would be best for Apple’s prospects.
  8. Turn the indie authors into a major force – although Amazon and Smashwords have an early start on that.
  9. Create a subscription model. Publishers might not buy it as there’s potential for disaster.

There are definitely ways an entirely new player or one of the dangerous 3 (Amazon, Apple, Google) could win both the eReader and eBook wars.

 Each of them have their own unique strengths –

  1. Google have search and open.  
  2. Apple have an early lead in Mobile and their Apple hordes.  
  3. Amazon have a focus on reading and publishing and early leads in a lot of book and publishing related areas.

Notice how they each have a reason customers love them.

Amazon have the early lead and are doing a lot of things right. In many ways the eBook and eReader Wars have turned into attempts to slow Amazon down and figure out a way to beat them.

Apple and Amazon both have very strong strategies and are the likeliest to win it all. It’ll be interesting to see exactly what Google brings to the table.