Google's (NasdaqGS: GOOG) launch of e-book store has put the search giant in direct competition with market leader Amazon (NasdaqGS: AMZN), unfolding an interesting rivalry in the coming days.

On Monday, Google has made its foray into the world of e-books official with the launch of Google eBookstore, featuring the company's massive library of digitized works online at books.google.com.

Google's eBookstore offers hundreds of thousands of digital books from publishers such as Macmillan and Random House. 

However, Amazon has not allowed Google to rest on its launch. Seattle, Washington-based Amazon has added two new Kindle features, only a day after the Mountain View, California-based Google launched its e-book store.

Amazon added a new feature in its Kindle for the Web, enabling users to read full books in a web browser and enable any Website to become a bookstore offering Kindle books, a key feature that had differentiated it from Google's e-book store - the ability to read in a browser.

Kindle for the Web makes it possible for bookstores, authors, retailers, bloggers or other website owners to offer Kindle books on their websites and earn affiliate fees for doing so, said Russ Grandinetti, Vice President, Kindle Content. Anyone with access to a web browser can discover the seamless and consistent experience that comes with Kindle books.

About two months ago Amazon began letting people read the first chapters of Kindle e-books free through Web browsers. The expanded version of Kindle for the Web rolling out next year will allow bookstores, authors and others to earn fees for selling Amazon's digital books at their websites.

Amazon, in a release issued on Tuesday, announced that Kindle for the Web will expand to enable anyone with access to a web browser to buy and read full Kindle books, without requiring any download or installation.

Earlier, Amazon required users of its Kindle e-reader device to buy books from its store only. Kindle users' accounts, however, also allow for reading e-books on multiple devices via a software application.

Kindle books can be read using several gadgets including smartphones and iPads.

The latest feature of Amazon has been aimed at making a dent straight into the heart of Google's e-book marketing strategy Buy Anywhere, Read Anywhere.

Google, at its launch of e-book store on Monday, claimed that its e-book platform was not tied to any device and its books can be read on a variety of smart phones, e-ink readers, tablets and PCs. But, the latest Kindle for the Web feature has certainly bridged Amazon's gap with Google.

Amazon's update to Kindle for the Web will also support Chrome OS devices, including the new Chrome OS Notebook, as well as the Chrome browser and other web browsers.

Amazon also said its Windowshop app is available starting Dec.7 in Google's new Chrome Web Store. Windowshop is a shopping app developed by Amazon exclusively for iPad.

Like Amazon Windowshop for the iPad, Windowshop for the web offers a completely new browsing interface that is optimized for the speed and fluidity of modern web browsers, Amazon said in a statement.

The new Chrome Web Store offers our customers a convenient way to experience Windowshop, said Eva Manolis, Amazon.com's vice president, Retail Customer Experience. Windowshop's fluid UI is optimal for the impressive speed of the Chrome browser, and offers customers an experience they can only find with Amazon.com. We think customers are going to love Windowshop for the web.

Both Amazon's update to Kindle for the Web and Windowshop for the web was demonstrated Tuesday at a Google Chrome event.

The Battle Begins...

The two new features that Amazon said will be added to Kindle make all the difference or fill the gap between Kindle and Google's just launched e-Book. By adding a service that helps a user read entire books on the browser and by enabling websites to store Kindle books, Amazon squared up against the Google onslaught.

Analysts say a spruced up Kindle will give Google eBook a run for its money as Amazon can leverage its early advantage while for Google, it is a new market.

Meanwhile, Google's cloud-based eBook strategy that is certain to make a dent on the sales of traditional bookstores and e-book stores such as Borders and Barnes & Noble rather than Amazon.

Google Edition allows users to purchase a book via Google or through its retail partners. Consumers have the flexibility to pay through a Google account or through an online retailer. Once a Google Edition e-book is purchased it is stored in an online book shelf which can be accessed by users from their browser from any web-based device.

The business model is based on revenue-sharing between Google and publishers while the onus of processing the payment lies with Google. Also Google can avail discounts on books as it bundles titles with other complimentary products from retailers.

Also another business model that Google avails through Google Edition is that it can act as a technology partner for retailers who need e-commerce and merchandising support. It can act as a bridge for eReader device makers as well. 

Thirdly, Google acts as a technology partner with publishers through its Google Edition as it offers them the technology to create e-Books and leverage on the Google Books.

Today is the first page in a new chapter of our mission to improve access to the cultural and educational treasures we know as books, Product Manager of Google Books Abraham Murray wrote on the company blog late on Monday.

The launch has the potential to break new ground as around three million books can be downloaded on to an Apple iPhone, or other such devices through a free application while the cost will be less than the list price of the books. Readers will also get to see a sample of the book before they buy.

Murray said Google's journey has only just begun and that the launch of the Google eBooks was an initial step toward giving you greater access to the vast variety of information and entertainment found in books.

The Kindle Store offers the largest selection of books people want to read, including 101 of 111 New York Times Bestsellers and New Releases from $9.99 onwards. Millions of older, out-of-copyright, pre-1923 books are also available to read.

On the other hand, Google's new e-bookstore will give users access to three million titles and will be available on a number of different platforms including laptops, netbooks, tablets, smartphones and e-readers. Essentially as long as the user has modern browser, they will be able to read their eBooks from Google.

However, it will be an arduous task for Google to prove itself as a worthy competitor to Amazon, which has an early mover advantage and has strong apps for each and every device.

The road is not smooth for Google, whose lack of competitive pricing and consumers' preference for reading eBooks on dedicated devices like the Amazon Kindle or Apple iPad over reading on a PC screen could act as initial roadblocks.

Further, Google's inability to sell physical books along with digital titles will also provide a competitive advantage to companies like Amazon, which sells both.

As of now, Amazon has narrowed the gap with Google by making its e-books less device-dependent. It now becomes more or less a matter of brand choice like where one wants to pick up ebook -- from Amazon or Google or Apple?