Not content to merely offer the Peanut Press e-book reader preloaded in its new line of PDAs, Palm Inc., producers of the Palm Pilot, announced the acquisition of Peanut Press, a firm that sells and distributes e-books for the Palm OS, and the Peanut Press online retail site from netLibrary. Terms of the acquisition were not disclosed.

Peanut Press will change its name to Palm Digital Media and the Peanut Press e-book reader will now be known as the Palm Reader. Palm Digital Media will also become a business group within the Palm company. Palm will retain all 17 Peanut Press employees and the company will remain in Maynard, Mass.

While the acquisition was unexpected, it is not surprising. Peanut Press specializes in distributing e-books that can be read on handheld devices using the Palm OS. The move will allow Palm to expand its selection of handheld applications, adding a growing selection of e-books targeted at the consumer, professional and educational markets. With 11 million Palm OS PDA devices in use, Peanut Press e-books are generally among the better-selling digital titles. Peanut Press offers a list of more than 2,000 titles through its online storefront (, and the acquisition places Palm in the forefront of the nascent e-book distribution business.

"It's an overpowering opportunity," said Mike Lorion, v-p of vertical markets at Palm Inc. "Leisure readers, business professionals honing job skills, commuters catching up on the Wall Street Journal or students backpacking 20 pounds of books can benefit from being able to carry reading materials in a device that weighs only ounces."

Marge Gammon, senior director of marketing at netLibrary, said the sale of Peanut Press reflected netLibrary's efforts to focus its business efforts on the library and institutional market rather than consumer readers. "There's no less interest in e-books here," said Gammon. "We've grown Peanut's list of titles to more than 2,000. But we want to give more support to our institutional customers. It didn't make sense for us, and it's a great fit for Palm. We can grow the e-book market for consumers and institutions."

Palm Inc. also announced an agreement with Franklin Electronic Publishers to license FEP's digital reference works to be marketed under the PalmPak trademark.