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During the last few years, ebooks have become one of the new frontiers for digitization in the publishing and library communities. No one doubts that ebooks are here to stay and are fundamentally changing the future of publishing and book distribution. However, with the crash of the .com marketplace, continuing weaknesses within the economy and the lack of low-cost ubiquitous hand-held readers; it is very unclear who or what will emerge as market leaders. The current track record is not good.
On January 24, 2002 the sale of netLibrary to OCLC was closed. netLibrary was sold at a mere $10 million even though well over $100 million had been poured into the company through various venture capitalists. The reason was that on October 13, 2001, netLibrary announced that its venture capital funding had not materialized and that sales were not sufficient to meet its debt and other obligations. The company was going into bankruptcy court. On October 24th, the management at netLibrary announced that they were looking for interested buyers so that they could continue operations under new owners. After a month of waiting, OCLC announced that they had made an offer to acquire the assets of netLibrary for $10 million.
The initial reaction by the library community and netLibrary themselves was very positive. OCLC is a non-profit membership organization of libraries and netLibrary had been selling ebooks almost exclusively to academic and public libraries that were OCLC members. One of the concerns in the library community was if netLibrary was sold to a specific publisher (or small group of publishers) it could have become an electronic publishing arm of just one company and lose its role as a distributor of ebooks from many publishers. Or, if someone had purchased netLibrary outside of the traditional library or publishing community, it could have radically changed directions that could have alienated its current customer base. It is unclear how OCLC will turn netLibrary from an unprofitable venture into a program that makes money. Certainly the shedding of debt through the bankruptcy process will make things easier. OCLC will also need to look into netLibrary's current sales model to see if it is sustainable and can be...