• by Laurie Sullivan  @lauriesullivan, June 2, 2009

Google will begin selling ebooks this year, the Mountain View, Calif. company confirmed Monday. Industry watchers believe the decision strengthens Google's position to compete better with Amazon as well as its play in banner advertising, although it's too early to tell whether paid search campaigns will become part of this move.

Google had announced a partnership with Sony in March that made 500,000 public domain book titles available to U.S. consumers for free. The out-of-copyright books were published in 1923 or earlier. The agreement made available more than 600,000 titles from its eBook Store, which overshadowed announcements for the closed-format titles that consumers can only read on Amazon's Kindle.

Now Google says it will offer current titles in an electronic format online. "We've consistently maintained that we're committed to helping our partners find more ways to make their books accessible and available for purchase," says Gabriel Stricker, Google spokesperson. "By the end of this year, we hope to give publisher partners an additional way to sell their books by allowing users to purchase access to Partner Program books online."

Google wants to build and support a "digital book ecosystem" that allows its publishing partners to make books available for purchase from any Web-enabled device.

While details are scarce, it appears that publishers will have greater control on pricing. The books will sell through Google's ebookstore. Amazon's books for Kindle sell at about $9.99. But for Google, it all comes down to data from advertising.

Web-enabled devices, such as ebook readers, provide feedback. Google exited radio and print because information suggesting advertising worked wasn't available, but TV enables them to track interaction through set-top boxes. Aaron Goldman, managing partner at Connectual, says it's not only tracking response, but engagement with the ad. Google relies on that learning algorithm to provide services.

Forrester Research Analyst Sarah Rotman Epps says to expect more ebook readers to offer advertising support. "Google is offering an alternative to Amazon's business model because they are positioning the ebooks as open -- meaning you can read the content on any reader," she says, adding that a Google reader is also a possibility.

Showtime may have cracked the code to monitor consumer interaction with advertisements on ebooks. On Monday the cable network began marketing a new show by running a banner ad on Amazon offering Kindle owners a free, downloadable version of the pilot script for the new series "Nurse Jackie," according to Stuart Zakim, a Showtime Networks spokesman. "It's tied to a media buy on Amazon," he says, before adding that the show premieres June 8.

So what's stopping Showtime from running banner ads on other ebook services? Nothing, Zakim says. "We are the first TV network to reach out to thousands and thousands of Kindle users," he says. "I realize the script isn't the same as watching the show, but it's another way to expose people to Showtime content. If it's tied to a media buy we would negotiate the rate with Google, too. We want to push the content. There are no exclusives."