Borders electronic bookstore went live on Wednesday, and the head of the company's bookselling business predicted that it would quickly win a sizable piece of the fast-growing sector.
The launch comes nine months after the debut of the Barnes & Noble Nook e-reader and three months after Apple introduced its popular iPad tablet computer. E-books had already gained popularity with Amazon.com's Kindle reader.
The Borders e-bookstore will offer 1.5 million titles, including books that can be downloaded for free. Amazon offers 620,000 books as well as 1.8 million out-of-copyright titles that can be downloaded at no cost, and Barnes & Noble says it offers 1 million titles.
Borders said it aimed to secure a 17 percent share of the e-book market by July 2011.
We'll take market share just by turning it on, Mike Edwards, chief executive of the Borders Inc operating division, told 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 urgency for Borders is clear. Sales fell 11.4 percent at its namesake stores open at least a year and on its website during the first quarter.
Edwards said that Borders, the No. 2 U.S. bookstore chain by sales behind Barnes & Noble, had data and e-mail addresses for the 38 million customers in its loyalty program as well as about 700 stores at which to promote its virtual bookstore.
Barnes & Noble told investors last week that it had won 20 percent of the U.S. e-book market since launching the Nook, exceeding its share of physical book sales.
Currently, about 5 percent of Borders sales, including physical books ordered online, go through its website, representing about $100 million this year. Edwards said online sales had soared by virtue of improvements to the website.
Besides applications recently launched for Apple's iPhone and iPad, Borders introduced new applications for Blackberry smartphones and phones with Google's Android software.
Edwards said Borders was a bookseller not an e-reader device maker. By the end of 2010, Borders expects to sell 10 different kinds of e-readers in stores and online.
A Goldman Sachs report in April said e-book sales made up 3 percent of overall U.S. book sales now and would rise to 12.8 percent by 2015.
Edwards expects that ultimately 20 percent of book sales will shift online. Yet Edwards and Barnes & Noble Chairman Len Riggio both separately said store count would remain stable.
The two retailers run a combined 1,500 or so U.S. stores, and Edwards conceded that might be high in the long run.
The store base at large would probably shrink, he said.
Until then, booksellers are trying to decide how to stock shelves being emptied of physical books. Borders is considering everything from children's merchandise to consumer electronics and apparel.
The pressure on us is not on the digital side, he said. How you create that new retail experience, that's where the art is going to be.
(Reporting by Phil Wahba; Editing by Michele Gershberg and Lisa Von Ahn)