Private equity firm Apollo Global Management will take Rackspace private in the all-cash deal.
eBook Technologies has patents and software desired by Google, an analyst says.
Google Inc. has bought eBook Technologies, a company that sells technology used to operate digital reading devices, along with related publishing tools and software. Neither Google nor eBook said how much the search engine giant paid for the company.
“Working together with Google will further our commitment to providing a first-class reading experience on emerging tablets, e-readers and other portable devices,” eBook said on its web site.
The acquisition comes about five weeks after Google opened its eBookstore e-commerce site, where consumers can browse and search through more than 3 million free books, and purchase hundreds of thousands more titles. Consumers can download content using a variety of devices, unlike Amazon.com Inc.’s Kindle store where only readers who have Kindle digital readers or the Kindle mobile app can access books.
Google bought eBook Technologies to gain the company’s patents, software, employees and hardware, with the patents and software likely the most important assets, says Dmitriy Molchanov, a analyst who covers e-books for Yankee Group. The company developed a software interface that resembles Shelfari's virtual bookshelf—virtual bookshelf technology enables readers to share and organize their favorite content online. Amazon, No. 1 in the Internet Retailer Top 500 Guide, bought Shelfari in 2008.
Molchanov says Google will use eBook’s assets to boost the amount of content in Google’s eBookstore and also to make it easier for consumers to find content there.
“The human capital at eBook Technologies is substantial as well,” Molchanov says. “Between the two of them, John Rivlin and Garth Conboy, the CEO and president, hold more than eight e-book-related patents. Adding them to the Google team will help Google's eBookstore bring new innovations to market.”
Molchanov estimates that U.S. consumers by 2013 will buy 381 million e-books each year, four times the amount purchased in 2010. Annual e-book sales will reach $2.7 billion within the next three years, he says, even as the average price for an e-book falls to $7, down from more than $9 in 2009.