A Big Bid for E-Bookworms

Digital delivery of movies and music is huge, but the bonanza stops at books. Sony (NYSE: SNE) and Borders (NYSE: BGP) want to get ahead of that curve, and they've taken their existing partnership to a whole new level.

Sony is releasing the latest version of the Sony Reader, and Borders will nearly double the number of its stores that offer the e-book device, to 500. In addition, the companies will collaborate to create a co-branded online store that will allow people to download e-books. Borders is ending its partnership with Amazon.com (Nasdaq: AMZN) soon, and branching out on its own in e-commerce, so its attempt to position itself on the cutting edge in e-books is understandable.

Then again, e-books have been slow to take off. Maybe that's due to the costly readers; Sony's sells for roughly $300. And since book prices through Sony's Connect site are mostly a few dollars shy of the retail price, you'd need to buy a small fortune's worth of books just to offset the reader's price.

A Forbes article from 2000 cited Anderson Consulting's prognostication of a $2.3 billion market for e-books by 2005. That hasn't even nearly come to pass. iSuppli data from this past summer theorizes the e-book market could be $9.4 million by 2010, from just $3.8 million this year. If history is any judge, this market's seemed promising for quite a while, but it hasn't yet panned out in the U.S. And I'm still not sure the time is now ripe for e-books.

The Sony Reader first started making news in early 2006, but has anyone heard much since? (I haven't.) Consumers still more enamored of devices like their Apple (Nasdaq: AAPL) iPods, which can play audiobooks purchased from the iTunes Store. Amazon.com has its Kindle device in the works, along with digitally distributed short fiction and the Amazon Upgrade option, which allows people to read and mark up digital copies of their physical books. Meanwhile, Google (Nasdaq: GOOG) has its own bookish plans, though copyright concerns have prompted some publishers to mount strong resistance to Big G's efforts.

Both Sony and Borders are the midst of turnarounds, and each could use a big, forward-thinking winner of an idea. I'm just not sure another big e-book push fits the bill. The whole initiative hinges on a $300 device, a consistently underwhelming e-book market, and an ever-evolving slate of options for alternative digital content. Sony and Borders' big plan is a nice idea, but we'll have to wait for a few chapters yet before we see how it turns out for these companies or their shareholders.