Microsoft inks e-book deal with WHSmith

The deal was unveiled today at the London International Book Fair in Olympia.

Kate Kennedy, joint MD for whsmith.co.uk, said: "Through traditional retail, web and WAP, WHSmith has a commitment to being available wherever our customers want to be. Now we can also be available in whatever form our customers want."

Jeff Ramos, Microsoft's emerging technologies global marketing director, said: "WHSmith is top of the list of UK book retailers with a global brand recognised across the world. It's great that both partners have the same sort of leadership and commitment to innovation."

The deal will see Microsoft developing a whsmith.co.uk branded version of its Microsoft Reader as well as its digital rights software. whsmith.co.uk is committed to selling e-books on its website by the end of the summer, and plans to have up to 1,000 titles available at launch.

The e-books will be viewed on a variety of devices running Reader software, which attempts to make text easier to read than on PCs, laptops or standard PDAs.

However, the relative immaturity of the market means vital issues - notably pricing - are still to be resolved. WHSmith claims they should be just under the price of traditional paperbacks. However, the company will wait to see how customers use e-books and added the potential ability of people to download book extracts will mean the generation of different pricing models.

Microsoft already has deals with US e-tailers including Amazon and BarnesandNoble.

Today's partnership is non-exclusive, and other deals are thought to be in the offing. As it is, whsmith.co.uk claims to be in the top ten of UK e-tailers, but does not have the profile of pureplay online bookstores such as amazon.co.uk and bol.com.

There are a number of other barriers to adoption of e-book technology. Firstly, the author's permission has to be gained to put books online, as traditional rights agreements don't cover the download of content.

Also hardware vendors have to agree to make devices compatible or pre-install the Reader software. Microsoft's main rival, Adobe, says it overcomes this problem by basing its e-book technology on the already popular Acrobat Reader.

However Mike Homer, analyst at Forrester Research, said the market will remain a niche one. He told silicon.com: "This will never be the dominant channel for the publishing industry - we're not going to see people reading novels in an e-book format."

Microsofts Ramus admitted the hardware needs to improve before the market can take off.