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NetLibrary Buys Peanut Press
Steven M. Zeitchik -- 2/14/00

The consolidation of the e-book industry continued last week with the announcement that netLibrary, the Boulder, Colo., company that sells online access to, and site licenses for, textbooks and other educational materials, has acquired Peanut Press, a book-content provider for palmtop computers. Terms of the deal were not disclosed.

Peanut president Jeff Strobel cited financial and technical reasons for completing the deal. "This is a company that has really deep pockets and rows of computers that can get out 100 books a day," he said. A conversion rate that fast could actually outstrip title acquisition (Peanut has several hundred titles available and at least 1,000 more waiting to go). But Peanut stresses that infrastructure concerns are paramount when it comes to reaching the goal of tens of thousands of e-book titles, and hopes netLibrary's ability to convert large numbers of books quickly will help persuade publishers to turn over titles.

No change is planned in the Peanut brand, nor should publishers expect a change in their relationships with the e-house. Peanut's offices, at least for the short term, will remain in Wayland, Mass. The company will not receive a seat on netLibrary's board.

Peanut had first looked to netLibrary as a potential investor or strategic partner; after a short time, it realized that a more ambitious melding made more sense. While netLibrary was not yet a competitor, a slight "shift in focus" could have made it a formidable one, said Strobel--netLibrary has made available more than 10,000 titles.

While the Colorado company has made only tentative steps into the consumer market, notably with a radio ad campaign over the holidays, the acquisition allows it to tap into Peanut's consumer efforts. It also gives netLibrary a platform for downloadable books.

In the last month, four of the premiere e-book companies--NuvoMedia, Softbook, netLibrary and Peanut Press--have been reduced to two, essentially drawing the lines before the battle has been fought. "This happened a little faster than we expected," Strobel said.

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