Google is gearing up to challenge Amazon’s dominance in the e-book market. The New York Times is reporting that the company signaled its intention to introduce a system for publishers to sell digital versions of their books at the BookExpo convention in New York this past weekend.

According to the report, customers will be able to purchase books directly from Google on any device that has Internet access–even smartphones. Publishers would set the retail pricing for new prints, which is expected to be equivalent to hardcover pricing. However, Google is reserving the right to adjust any pricing that it finds to be “exorbitant,” the Times noted.

Shoppers may find better bargains on Amazon: It sets retail pricing for some books below its wholesale price. Beyond that, the biggest differentiators are that Amazon provides a closed loop system with synchronization between its bookstore and Kindle reading device. I think that provides for a superior user experience, and am not alone in my opinion.

The Kindle has quickly become a product line that some think could be a billion dollar business. Citigroup estimates that Amazon sold over 500,000 e-book readers last year, and has christened the Kindle the “iPod of the book world.” 

Moreover, there is a boneyard of failed music stores that never got the synchronization part right. I recall hearing the same argument used against iTunes/iPod that is being used against the Kindle: A proprietary system isn’t right.

That mindset buried a lot of alternatives as Apple thrived, and built up its ecosystem. The Kindle has a similar advantage.

That is not to say that it is not in the interest of publishers to have alternative channels for distributing books digitally. Publishers certainly do not want Amazon to set the price structure, determine the selling price, or what digital rights management restrictions will be imposed on e-books.

Google would be wise to work with its Android hardware partners to establish a first tier of reading devices–even if they aren’t dedicated strictly to reading. Sony is a likely partner, even though it doesn’t use Android. With the right partnerships, Google’s e-book store could thrive, but it may still end up getting far less of the pie than Amazon.

 
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Read more: Amazon Kindles, E-books, Google