Publishers Check Out Internet Book Sales

The Internet's presence in American culture and business continues to spread like kudzu. And American publishers by necessity are beginning to understand this new medium's repercussions more quickly than other industries.

Worried that sales on the Internet from a home or office computer will threaten the livelihood of booksellers and thus their own businesses, publishers are cautiously testing Internet sales. No one wants to miss an opportunity, but no one wants to be replaced by the new technologies - or, in Internet jargon, "disintermediated."

Booksellers' concern revolves around the potential for publishers to deal directly with consumers and the media on the Internet, says Larry Daniels, director of information technologies for the National Association of College Stores in Oberlin, Ohio. The phenomenon could mean the elimination of middlemen such as bookstores, he says.

"There is also the potential for publishers to be 'disintermediated,'" Mr. Daniels adds, noting that computer-literate writers can already publish and distribute their own works on-line.

But so far, instead of eliminating middlemen, the Internet has encouraged the development of a new set of electronic middlemen.

Steve Potash, president of OverDrive Systems, an electronic book publisher in Cleveland, is one of many techies developing avenues for sales of books on the Internet. He describes his electronic book products, sold on the OverDrive Electronic Book Aisle (www.bookaisle.com), as computer software with all the features of physical books.

OverDrive has "distribution" contracts with many large publishing houses, including Time Warner Electronic Publications, McGraw Hill, and Simon and Schuster.

"If a user downloads an entire book," Mr Potash says, "he's getting electronic book software with software features." Any index the book might have, for instance, will appear as a menu."

"You can search a book cover to cover on-line to find out if it has anything of interest before you purchase the book," Potash says. "You can search a cookbook for recipes and download the one you want. You can search an index for references to a particular topic and buy only the chapters you need."

Electronic publishing has been a particularly successful way to distribute encyclopedias, computer books, how-to books, and technical books that depend on current data, Potash says.

But publishing houses are skeptical of electronic book-publishing capabilities. They remain uncertain about the Internet's future in the sale of physical books. At present, on-line book sales total less that 1 percent of overall book sales.

Jordan Gold, vice president and publisher of MacMillan On-Line, considers the Internet a largely experimental tool.

"The Internet is a great place to get information about our books," Mr. Gold says. MacMillan sells a few books electronically, and offers Web-site visitors an opportunity to buy books through the mail. But Gold does not consider the Internet a primary avenue for sales.

"Our survey results show that most people would rather buy from bookstores," he says.

Booksellers are equally tentative about going on-line. "We're looking into what makes the most sense," says Lisa Herling, vice president of corporate communications for Barnes and Noble. "We'll probably have something in the next year."

As the mainstream publishing industry hesitates on the Internet's sales possibilities, smaller retail companies are sprouting up all over the information superhighway. These companies do not share the publishing industry's squeamishness about using the Internet as a sales medium.

Dial-A-Book, the idea of former Ziff-Davis executive Stanley Greenfield, attempts to remedy one of the primary flaws in on-line sales: the inability of potential customers to browse the books.

"People like to browse the books before they buy," Mr. Greenfield says. "You can read a book review, but it doesn't give you a sense of the level at which the book was written."

Dial-A-Book gives Internet users the opportunity to browse the first chapters of more than 450 books. The company does not build traffic for its own page on the World Wide Web. Instead, it has a list of clients including CNN, ESPN, and The Atlantic Monthly, who link their Web pages to Dial-A-Book pages to sell specific books.

Uniting publishing houses, booksellers, special interest groups, and consumers on the Internet, Dial-A-Book may represent a model for future internet industries. But Greenfield is waiting for the reading public to catch up.

"Up to now, we haven't sold many books," he says, suggesting that consumers find the service too new, or alien, or are still afraid to enter their credit card numbers on-line.

Perhaps the only Internet bookseller with cause for immediate optimism is Jeff Bezos, president and founder of Amazon.com Books (www.amazon.com), the leading bookstore on the Internet.

"We are using the medium to do what you couldn't do in the physical world," Mr. Bezos says. "The largest physical bookstore in the world carries 170,000 titles. Our on-line catalogue has 1.1 million titles." The catalogue, he claims, would be the size of seven New York City phone books.

Once a five-person company based in Bezos's Seattle garage, Amazon.com has grown 34 percent per month for the past 12 months. It became a hot venture-capital prospect when it won an investment from the investment firm Kleiner, Perkins, Caufield & Byers, which specializes in high-tech companies.

"The main thing that holds [other sites] back is that they're not offering a value proposition return for a definite level of inconvenience," Bezos says. Compensating for the inconvenience of server failures and computer glitches, Amazon.com offers more titles and specialized books than any other single bookstore in the world.

But not even Bezos suggests that on-line sales will replace more traditional bookselling methods.

"We are not really competing with physical bookstores," Bezos says. "The key is that people like to get out of their houses. I still go to physical bookstores, and I'm not going to stop. I even buy books there. I like the tactile experience."

Common Interests Prevail On Line

If you are a book lover, the internet can supplement your regular shopping routine. But you really must love books, or books on highly specialized topics, if on-line shopping is going to work for you.

The industry leader, Amazon.com, succeeds because of its enormous catalogue. Gathering titles from 12 national wholesalers and 20,000 independent publishers, Jeff Bezos's company offers books in specialized categories that no major physical bookstores will carry.

There are ways in which the "net takes us back centuries to communities based on common interests," says Amy Cook, manager of new media at Random House. "Web users are interested in information gathering. The books are slightly more practical and academic." For the most part, they are not mass-market books.

In addition to prohibitive on-line fees and shipping and handling charges, general-interest customers are still hesitant to leave their credit card numbers on-line. As a percent of total US book sales, Internet sales are well under 1 percent, Bezos says.

And until readers grow accustomed to reading from a computer screen and demand more information in this format, electronic books will only be used in special cases.

At this point, Internet booksellers pressure physical bookstores to hone in on what Lisa Herling of Barnes and Noble says they do best anyway: provide "a wide variety of books with good customer service and a comfortable setting."