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According to a report in the New York Times this morning, Google is getting ready to enter the eBook market by providing publishers with an infrastructure for direct-to-consumer sales. The Times reports that Google discussed this initiative with publishers at last weekend's BookExpo in New York. According to the times, Google is mostly interested in creating an architecture that would enable publishers to do direct-to-consumer sales (with the checkout handled by Google Checkout, we assume). But there is also no reason to believe that this initiative could not include some kind of electronic store, maybe on top of Google's controversial Google Books service.
Last October, Google announced that it had reached a deal with the Authors Guild and the Association of American Publishers, that would allow Google to scan, display, and sell advertising against out-of-print books. The advertising and subscription revenues from this deal would be shared between Google, the authors, and publishers. In the last few days, however, there have been a number of setbacks, and while the project probably won't be derailed by these, it looks like there will definitely be some delays.