Entrepreneurs are rediscovering the digital book. This time their start-ups might fly

Ahem. A reading from Stephen King's The Girl Who Loved Tom Gordon: "The water was not quite up to her knees. The stuff her feet were sinking into felt like cold, lumpy jelly. ..."

Contemplate the absurdity of reading a chunky Stephen King novel -- or anything longer than a stock quote, really -- on a tiny handheld-computer screen. Reading a book is a visceral experience impossible to duplicate in liquid crystal display. In the early 1990s, companies like Voyager and Vertigo Development Group sold books on disk, but their products failed to catch on. Many readers' computers didn't have the CD-ROM drives necessary to "play" books on their screens. Besides, "you don't curl up with your computer," says Patrick Breen, former senior architect at Vertigo. And publishers were still typesetting manuscripts, making it a huge hassle to digitize a book.

But now it looks as if E-books, despite the absurdity factor, might take off. The Internet's distribution power, together with higher-resolution screens and powerful processors, have made the world a much friendlier place for electronic books than it was just five years ago. And publishers now create books on computers, so the files are already in digital form -- "a complete revolution, and it happened between 1993 and 1996," says Paul Hilts, technology editor for Publishers Weekly.

Last fall, several E-book companies joined forces with Microsoft and, with the blessings of publishers like Simon & Schuster and Bertelsmann, defined a technical standard for publishers' electronic files so that books can be read from desktop computers, dedicated reading devices (portable gizmos used solely for reading books), and handheld computers. That flexibility should help develop consumer confidence and thus a market, says Kevin Hause, a consumer-products analyst for IDC, in Mountain View, Calif. Hause projects that by 2004, electronic books and periodicals will be a $2.5-billion market -- hardly pennies, but still just a fraction of today's $25-billion market for good old-fashioned books.

Pricing for reading devices has been a hurdle, but the costs are starting to drop. Last November the price of the Rocket eBook, a reading device from NuvoMedia, also in Mountain View, dropped to $199 from $499 a year earlier. Another company, SoftBook Press, in Menlo Park, Calif., has also brought reading devices to market. (In January, Gemstar International Group Ltd., in Pasadena, Calif., acquired NuvoMedia and SoftBook. Gemstar markets the VCR-programming system VCR Plus+. The E-book companies will remain separate entities.)

Another E-book contender,, in Bellevue, Wash., abandoned plans for its reading device last summer to focus on software after president Don Ledford realized that handhelds were going to swamp his Millennium Reader. "Everyone who's in this business is in it for the content," Ledford says. "Why struggle upstream to try and sell 20,000 units at cost so you can try and sell some books, when 10 to 20 million new handhelds are flowing in?"

That's where comes in. The Maynard, Mass., start-up offers free software, called Peanut Reader, for reading books on Palm OS or Windows CE handheld devices. Peanut Readers let readers flip through, dog-ear, and write all over books.

To soothe publishers worried about readers "sharing" books without paying for them, E-book producers are developing encryptions and passwords that safeguard content. Such measures have convinced major publishers -- like Random House and Simon & Schuster, which signed deals with Peanut -- to join the smaller publishers that jumped in earlier.

Peanut president Jeff Strobel, who cofounded the company in April 1998, says that by the end of last year, some 10,000 people had bought the company's books, which cost the same as or less than a paperback. Strobel says revenues, currently in the six figures, increased sevenfold during 1999.

Lending further legitimacy to the E-book market, Microsoft plans to release new reading software this year. Still, it remains to be seen whether readers will become as fond of E-books as they are of, say, that battered, beloved paperback copy of The Catcher in the Rye. After all, it's probably not wise to read your E-book in the bathtub.

Search: "Red + Bumps"

Got a weird rash? has created what it believes is a compelling reason to eschew the mall pharmacy for E-commerce: online you don't have to query a stranger behind a counter about rash remedies. Instead, Web surfers can find answers for themselves in online books from $500-million health-and-fitness publisher Rodale Inc. -- all without leaving

Published on: Mar 15, 2000