Microsoft Says It's Not Building An E-Reader

But Microsoft has no interest in developing its own e-reader, according to CEO Steve Ballmer.

During a business trip to the Netherlands on Thursday, Ballmer told Reuters that Microsoft already has what it feels is a compelling product in the e-reader space. "We have a device for reading. It's the most popular device in the world. It's the PC," Ballmer said in the Reuters interview.

Ballmer told Reuters that Microsoft would be interested in working with Amazon to bring the ecommerce giant's vast e-book catalog to the PC, and also mentioned Barnes & Noble as a viable e-book partnership candidate. Barnes & Noble is reportedly working on an e-reader of its own that would be tied to its e-book market, eBookstore, which launched in June.

Microsoft and Amazon have already aligned with Yahoo in the e-book space to fight Google's Library Project, the search giant's effort to scan millions of books and compile them into the world's largest digital library. In August, the three vendors formed the Open Book Alliance, a group that also includes publishing industry groups, to oppose Google's e-book efforts.

Microsoft may not be interested in building an e-reader, but a tablet device could provide the same functionality. Last month, photos surfaced of a Microsoft tablet-like device codenamed Courier, which features twin 7-inch screens and an integrated camera, and is reportedly being led by J. Allard, Microsoft's chief experience officer and CTO of the Entertainment and Devices Division, who oversaw development of the Xbox and Zune.

With Google already throwing its weight around in e-books, and a long rumored Apple tablet possibly coming soon, Microsoft doesn't have the option of standing by as two of its biggest competitors -- and obsessions -- carve out share in the e-book market.