Borders Opens eBook StoreBorders Opens eBook Store

Borders Group launched on Wednesday an online e-book store that the nation's second largest bookstore chain hopes will narrow the lead held by rivals.

The online store is powered by Kobo, a Canadian e-book retailer that Borders has an investment stake in. The store offers a catalogue of more than 1.5 million electronic books, including free books.

Borders has set an ambitious goal of securing a 17% share of the e-book market by July 2011. The company believes it can sell nearly one in five e-books in the U.S. in a year, because the market as a whole is very young.

"The race to emerge as a retail leader within the digital category is just starting," Mike Edwards, chief executive of the Ann Arbor, Mich., company said.

To reach its goal, Borders will be battling the head start of rivals Amazon, Barnes & Noble and Apple. In addition, Google is expected to enter the e-book business later this year.

Borders' arsenal includes 10 million unique visitors a month to Borders.com and the email addresses of more than 38 million members of its rewards program. In addition, Borders offers two e-readers, the Kobo eReader and the Aluratek Libre eReader. Both devices sell for about $150 and Borders claims they have surpassed sales expectations. The company has not released actual numbers.

Like its competitors, Borders is also offering a mobile application to download e-books on a variety of devices. Borders has released an e-reader app for the Apple iPhone and iPad and announced Wednesday the release of an app for Research In Motion's BlackBerry and mobile phones running Google's Android operating system.

Borders also plans to leverage its physical bookstores in promoting its e-book business. The company plans to set up "Area-e" sections in all stores by early September, and staff the sections with salespeople who will demo products and answer customers' questions.

Driving Borders and competitors into the e-book business is soaring sales. The Association of American Publishers says e-book sales jumped 127.4% in April from the same month a year ago to $27.4 million. Sales for the first four months of this year are up 217.3% from the same period a year ago.