Kindle for the Web demos at Chrome event

Computerworld - Amazon.com on Tuesday demonstrated its update of Kindle for the Web, which will appear "in the coming months," allowing the full reading and annotation of Kindle books from a Web browser on any device and giving third-party booksellers the ability to embed a widget on their sites to sell Kindle books.

The move is widely seen as a direct response to the Google eBooks and eBookstore announced Monday, although Amazon has dominated thus far in the e-book sales arena.

Google's system is cloud-based and involves partnerships with smaller, independent booksellers. It allows users to read e-books from dozens of devices, with the exception of the Kindle, which has a proprietary format.

Amazon officials described the upcoming Kindle for the Web app at a Google Chrome event Tuesday and said it will work on a coming Chrome OS notebook, which was also described at the event.

Kindle books are available on the third-generation Kindle device, which sells for $139, as well as iPads, iPhones, Macs, PCs, BlackBerries and Android-based devices. The update of Kindle for the Web described Tuesday will allow the reading of full books, not just first chapters as in the Kindle for the Web beta announced by Amazon in September. It will also support bookmarks, notes, last page read, and highlights, no matter where the Kindle book was purchased or on what device, said Russ Grandinetti, vice president of Kindle content, in a statement from Amazon.

Amazon has about 60% of the market for e-book sales, according to Yankee Group analyst Dmitriy Molchanov, who said that a variety of new ways of buying e-books will diminish Amazon's majority market share to perhaps 30% in two years. In comparison, Forrester Research analyst James McQuivey estimated that Amazon sells about 66% of all e-books, and he believes that the company will continue to dominate despite the Google pressure.

"Kindle for the Web is a direct response to what Google is doing with eBooks, but I don't know if Amazon needs to do this," said Molchanov in an interview. "Amazon is making a nice tool that rounds out what they offer. It's actually funny Amazon is doing this, because of all the players in e-books, Amazon's position is the most secure."

The entire installed base of Kindle devices is about 10 million units sold over the past three years, Molchanov said. He forecast that about 6 million e-readers (not including multimedia tablets like the iPad or Galaxy Tab) will be sold for all of 2010 globally, which is low compared with other analysts' estimates. Of those 6 million, he predicts that about 3 million will be sold by Amazon, although some analysts predict that Amazon sales will be much higher, possibly more than 5 million. Amazon has never officially released Kindle sales numbers.

Even though Amazon faces pressure from iPad and Android-based Galaxy Tab-type tablets for e-reading, Molchanov said Amazon will try to retain a low-cost alternative e-reader and will not focus on color or more expensive features. "Kindle is focused on reading capability, and they are driving down the price and keeping it small," he said. "It's working for them and selling far better than other iterations. It has sold out in Canada."

Allowing third-party booksellers to install an Amazon widget on their Web sites will put Amazon into a warehouse-centric model of book distribution similar to Google's, Molchanov said. "It's more functionally efficient for Amazon, and they have no added costs but get 30% share of the books the smaller booksellers sell," he noted.

"This whole warehouse business model is the reason they are entering with Kindle for the Web, and not to protect their market share," Molchanov added.

McQuivey has noted that independent booksellers will face the dilemma of deciding whether to work with Google or Amazon as their online book warehouse in coming years.

Sales of printed books are still by far dominant in the U.S., with about $3 billion in sales for the first seven months of 2010, according to the Association of American Publishers. Sales of e-books in the U.S. for the same period were about $263 million.

But Molchanov noted that the share of e-book sales in the U.S. in 2010 has almost tripled from 2009's level. "E-book sales are indeed growing," he noted.

Matt Hamblen covers mobile and wireless, smartphones and other handhelds, and wireless networking for Computerworld. Follow Matt on Twitter at @matthamblen or subscribe to Matt's RSS feed. His e-mail address is mhamblen@computerworld.com.

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