Microsoft, Barnesandnoble.com team for e-bookstore

The two firms plan to launch a Barnesandnoble.com electronic bookstore using Microsoft Reader software.

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Microsoft and Barnesandnoble.com today said they will launch a Barnesandnoble.com electronic bookstore using Microsoft Reader software.

Microsoft said it has signed agreements with both Barnes & Noble and Barnesandnoble.com to develop and market the Microsoft Reader eBook store online. The announcement was made at the Computer Electronics Show taking place in Las Vegas this week.

While financial terms of the deal were not disclosed, company executives stressed the alliance is a "very tight relationship," but not an exclusive one.

"We think this will be a historic partnership," Dick Brass, vice president of technology development at Microsoft, said in a press conference held earlier today. "People will recall this as an important event ... and know that a change is coming."

"The publishers are going to join this revolution. ... They're not going to be able to stop it," said Steven Riggio, vice chairman of Barnes & Noble, who also led the press conference.

Microsoft Reader software can be used to read books that have been downloaded to portable computing devices. Reader incorporates Microsoft's ClearType technology, which makes it easier to view small text. Microsoft Reader works on a range of computing devices, including PCs, laptops, handhelds and pocket PC devices, which range in cost from $200 to $400. Executives said they will work on reducing those prices as well as offering eBooks at a cheaper rate than paper books.

Microsoft said it has already partnered with several large publishers in Europe as well as in the United States. Last November, Microsoft announced a deal with publisher R.R Donnelley to convert print titles into an electronic format. Simultaneously, a Barnes & Noble representative said the bookstore has taken a 49 percent share in online publisher iUniverse.com and will step up its promotion of e-books during the holiday season.

Executives said they will announce other deals with U.S. publishers within the next 30 days.

Microsoft has been eyeing retail outlets in a move to put itself before more consumers in new ways. Just last November, the Redmond, Wash.-based giant formed an e-commerce alliance with consumer electronic chain RadioShack to promote high-speed Internet connections and other Web services. Under the 5-year deal, RadioShack gives Microsoft a vast outlet to sell its stripped-down Windows CE software for TV set-top boxes, handheld devices and other consumer products as Internet usage quickly expands beyond desktop computers.

In today's deal, Barnes & Noble will market the new eBook store through various promotional services in all of its retail bookstores, the companies said. The new eBook store will be created on the Barnesandnoble.com Web site by the middle of this year. Executives said that, at launch time, thousands of titles will be available electronically to run on Microsoft Reader.