Google Readies Its Book Business - InformationWeek

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7/30/2009
05:23 PM
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Google Readies Its Book Business

As it prepares to become a major digital book seller, Google is striking partnerships with brick-and-mortar stores and trying to dispel concerns.

"Under the settlement, rights holders have choice, can opt out, can stay in or remove books from index," he said. "It's always been our policy that if people ask us not to scan or index their book, we'll respect that."

Under the settlement, Google will spend $34 million to fund a Book Rights Registry, which will maintain a database of copyright holder information and will oversee the disbursement of at least $45 million in payments to authors for books scanned without permission. It will also handle payments to Google book search partners for Google Editions sold to consumers.

With the settlement costs, Google will have spent over $100 million on its book scanning effort. "This is a very expensive project," said Clancy.

According to Clancy, Google will pay 63% of digital book revenue and will keep 37% for itself. As a point of comparison, Amazon pays Kindle authors a 35% royalty. Google plans to develop an algorithmic pricing model to find the ideal price for Google Editions. Initially, said Clancy, over 50% of titles will be $5.99 or less and over 80% will be $14.99 or less.

Amazon allows authors and publishers to set their own price for Kindle titles, with the caveat that it must be consistent with the price provided to other retailers or wholesalers.

Clancy also said that, in addition to selling digital books online, Google plans to sell Google Editions through brick-and-mortar book stores. He said that Google's retail partners should be able to get a similar cut of the sale price as they do today for printed books. "You should be able to buy one of these digital books anywhere," he said. "We really think it's important that the future of the digital book is an open, competitive space."

The issue of orphaned books -- books with no identifiable rights holder -- won't be a significant one, Clancy insists, given that 97% of book sales are in-print books. And while some parties still want Google to provide a license to use the orphaned books in its index, he says that's beyond the scope of the settlement. "We don't believe the class action construct allows the registry to license works that have not been claimed," he said.

As for the privacy concerns raised by critics, Clancy maintains that Google is committed to user privacy. Yet he was unable to offer a clear commitment because the settlement has not been approved and Google is still working out the details. In principle, he said that Google doesn't want to track people. But any online interaction will leave a record of the user's IP address on Google's servers and that information can sometimes be used to identify a user.

Google, said Clancy, still trying to figure out an IP address retention policy for Google Books. The company, he said, has security requirements under the settlement so IP address information will need to be kept for some period of time to track abuse. "That's something we're evaluating now," he said.

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