"The market for e-books has simply not developed the way we hoped, and given the overall economic climate, we can't jeopardize our thriving print business by carrying a money-losing operation indefinitely into the future," Larry Kirshbaum, chairman of Time Warner Trade Publishing, said in a statement.
The move comes less than a month after Bertelsmann's Random House Trade Group closed its e-book unit, AtRandom, because of scant customer demand. However, the publisher said it would continue to make e-book versions of its printed titles.
AOL Time Warner, the Internet and media giant, launched iPublish about 18 months ago to offer original and backlist e-books, as well as to look for ways to develop and buy new writing through the Internet. The iPublish.com Web site focused on creating an online community for writers and editors.
The sale of e-books, primarily digital reprints of existing print titles, will be moved to the Time Warner Trade Publishing group responsible for the electronic promotion of Warner and Little Brown print titles, the company said in a statement.
The Internet and media giant has been cutting poorly performing operations in recent months as it tries to stay on course to hit its financial targets amid economic uncertainty and the worst ad slump in recent history.
Last week, the company's magazine publishing arm closed three titles, including Asiaweek.
The economics of sustaining the type of publishing seen at iPublish on a broad scale was simply not there yet, but Kirshbaum said he thinks that iPublish will some day be recognized for establishing a template other publishers can follow.
Hype around e-books had swirled in the late 1990s during the dot-com boom, but little has been said in the last year. E-books have not excited many, with sales of such books barely showing up in the $96 billion U.S. consumer electronics or publishing markets this year.
Many analysts had said e-books were more expensive and harder to read than traditional books. Earlier this year, Jupiter Media Metrix had predicted there would be 1.9 million e-book users by 2005, up from about 100,000 earlier this year.
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