Will Sony Kill the Kindle?

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If Sony (NYSE: SNE) doesn't kill the Amazon.com (Nasdaq: AMZN) Kindle e-book reader, the Japanese electronics veteran will at least change how the Kindle works -- and how we read books in general.

Sony just launched the third in a refreshed line of e-book readers. With a seven-inch E-Ink screen and high-speed networking through the AT&T (NYSE: T) 3G network, this puppy can match features with the Kindle any day of the week. But it's not the hardware that is getting me all excited -- it's Sony's content library.

The company is tapping into the controversial Google (Nasdaq: GOOG) Books project to deliver more than 1 million public domain books to these e-readers free of charge. That's one huge source of reading materials that is sure to keep gadget owners occupied for a while.

But wait -- there's more! Sony is also making it easy to license e-books if your local library has physical copies of the book you want. Search, click, tap, and download a time-limited copy of Revolutionary Road to your Sony reader through the Overdrive library content network. Overdrive titles work on Apple (Nasdaq: AAPL) iPods and Amazon Kindles, too, but Sony makes it easy to find and get the titles you want, right from Sony's downloading software.

Convenience is king, and this combination of content sources opens up a whole new world of books for the ardent book lover on the go. There's no need to visit a library or a bookstore. It gives Sony a real competitive advantage over the Kindle, which is tethered to Amazon's own e-book catalog and forces readers to go the long way around to find Google Books or Overdrive titles. Amazon had better counter this shocker with expanded content of its own.

If I were Barnes & Noble (NYSE: BKS) or Books-A-Million (Nasdaq: BAMM), I'd be shaking in my boots. Real, physical bricks of paper and patent leather are quickly becoming a niche market as books follow music and movies into the online world. Sony just hastened that trend, and positioned itself alongside Amazon to profit from the digital publishing revolution.