Borders Enters E-Book Fray, Stays Out Of E-Reader Fracas

The new e-bookstore went live Wednesday with 1.5 million volumes. Borders, the second largest bookstore chain in the U.S., is late to the online e-book party compared to competitors Barnes & Noble and Amazon.com. Nevertheless, the retailer has set a goal of grabbing 17 percent of the e-book market within the next 12 months.

Only about 5 percent of Borders sales today are generated through its Web site, and those sales consist almost entirely of hard-copy book sales.

"We'll take market share just by turning [the e-bookstore] on," said Border CEO Mike Edwards in an interview with Reuters. "A lot of people have said, 'You're kind of late to the game,' and I'm saying the game actually just started."

The online bookstore is “powered by global e-reading service Kobo,” according to the Borders press release, and Borders sells the $149 Kobo eReader device, as well as the Aluratek Libre eReader, through Borders.com.

But the company is taking the position that it’s a bookseller, not an e-reader device manufacturer, and it’s supporting a handful of document formats with its digital offerings. Borders said supported formats include ePub and PDF, and free versions of the Kobo application that run on a range of devices, including Apple’s iPhone and iPad, PCs, Macintosh computers, BlackBerry phones and mobile devices based on the Android operating system.

Borders is providing “thousands of free titles” to help attract customers. The retailer is also offering its Borders Rewards loyalty program members benefits such as special gift cards and incentives on e-reader purchases.

While Amazon.com and Barnes & Noble have heavily invested in their Kindle and Nook e-reader devices, respectively, Borders is betting that “value-priced” e-readers like those from Kobo and Aluratek that sell for less than $150 will be a hit with cost-conscious consumers and boost its e-book sales – following the old razor/razor blades sales model.

Amazon and Barnes & Noble recently have cut prices on their e-readers to bring them more in line with the lower-cost devices.