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Press Release
Palm Acquires peanutpress.com, Becomes a Leading eBook Content Provider For Handheld Computers
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Palm Reader to Ship with New Palm m500 and m505 Handhelds;
Palm Announces Limited-time Introductory Offer Of
Stephen King's DREAMCATCHER for Just $14.95
SANTA CLARA, Calif., March 19 /PRNewswire/ -- Palm, Inc. (Nasdaq: PALM), a
pioneer in the field of mobile and wireless Internet solutions and a leading
provider of handheld computers, today announced that it has acquired
peanutpress.com, Inc., a leading eBook publisher and distributor of an
extensive selection of eBooks for handheld computers. peanutpress offers
titles from many of the major commercial publishing houses and, prior to the
acquisition, was a wholly owned subsidiary of Boulder, Colo.-based
netLibrary, Inc.
(Photo: http://www.newscom.com/cgi-bin/prnh/20010319/HSM015)
Financial terms of the deal were not disclosed.
This union makes Palm a leading eBook distributor for handheld computers
in the emerging eBook space. The move -- part of Palm's strategy to deliver
end-to-end handheld computing solutions -- enables the company to expand the
use of eBooks by consumers and mobile professionals, and in the largely
untapped education space.
While the eBook space is still fledgling, a December 2000 Forrester report
stated that "Digital delivery of custom-printed books, textbooks and eBooks
will account for revenues of $7.8 billion -- 17.5 percent of publishing
industry revenues -- in five years."
The deal includes a web-based storefront containing a growing list of
2,000 titles from most of the major U.S. publishing houses. It also includes
the Peanut Reader, the leading eBook reader application, which runs on
Palm OS(R) handhelds using Palm OS 3.0 and higher, as well as on Pocket PC
handhelds. Peanut Reader and peanutpress.com will be called Palm Reader(TM)
software and Palm Digital Media, respectively. Palm Digital Media, which will
become a group within Palm, will retain the 17 peanutpress.com employees and
remain in Maynard, Mass., where it is currently based.
"This is an empowering opportunity, one that will allow us to help people
make the most of their on-the-go-time," said Mike Lorion, vice president of
Vertical Markets for Palm, Inc. "Leisure readers, business professionals
honing job skills, commuters catching up on the Wall Street Journal, or
students backpacking 20-plus pounds of books can benefit from being able to
carry reading materials in a device that weighs only ounces and also manages
the rest of their information. Additionally, this is exciting because it
reflects the commitment of two leaders, Palm and netLibrary, responding to
customer demands and working to move the eBook space forward."
The company also announced that Stephen King's latest novel, DREAMCATCHER,
will be introduced simultaneously as a Palm eBook and as a hardcover book.
The introduction is slated for March 20 at 12:01 a.m. EST. Until March 23,
Palm will offer DREAMCATCHER for a special introductory price of just
$14.95 (U.S.).
Gregory Voynow, senior vice president and general manager of iPublish.com
at Time Warner Books said, "We've been selling eBooks through peanutpress.com
for almost two years, and we believe Palm's endorsement of the eBook space by
owning both the platform and being a leading eBook distributor for handhelds
is a strong signal that this new market will enjoy healthy growth in terms of
readers and titles for years to come."
eBook Applications
* Consumer -- Palm Digital Media already has a very strong presence in the
consumer space, and Palm Reader is a very popular application for novels
and business books. Current best-selling authors include
Michael Crichton, Scott Turow, Anne Rice, Michael Connelly and
Stephen King. Palm also offers a monthly or quarterly weekday
subscription to the Wall Street Journal and several magazines.
* Mobile Professional -- The mobile-professional area also is ideally
suited to eBooks as more and more mobile professionals need to stay
current with the latest business information while traveling or
commuting. Palm intends to expand its offering of business books
because of increasing demand. Additionally, companies can convert and
produce their own content for publishing manuals, training guides and
human resource materials accessible in an eBook format, using Palm's
development tools.
* Education -- Palm Reader provides an ideal reading platform for learning
and teaching. It can be used for a variety of reading applications,
including textbooks, study guides and classroom handouts. Palm expects
students and teachers in K-12 schools and in universities to gravitate
quickly to eBooks as more academic books and materials become available
in this format. Palm also expects academic eBooks to span the
curriculum and include such specialty areas as law, medicine, and SAT
and GMAT preparatory materials.
Palm Reader to Ship with New Models
Palm Reader will ship in the box with the newly announced Palm m500 and
m505 handheld computers, along with two eBooks, Tarzan of the Apes, by Edgar
Rice Burroughs, and 12 Valuable Ways to Use Your Palm, from Velocity Business
Publishing. Palm Reader, which can be used to view electronic books on either
Palm OS or Pocket PC handheld computers, has easy-to-use features such as
auto-scrolling, bookmarks, standard and large fonts and selectable viewing
orientations. Palm Reader will continue to support Pocket PC in addition to
Palm OS.
More information, including how to download free Palm Reader, is available
at http://www.palm.com/ebooks. Existing customers can continue to access their
accounts and purchase eBooks at http://www.peanutpress.com.
About netLibrary
netLibrary (http://www.netLibrary.com) is the leading provider of eBooks and
Internet-based content management services designed to fit the missions and
methods of libraries and the publishers who work with them. netLibrary
develops, archives, hosts, and securely distributes eBook collections on
behalf of hundreds of publishers of academic, reference, scholarly, and
professional books. More than 5,000 corporate, academic, public, and K-12
libraries currently utilize the netLibrary platform to offer eBooks to their
employees and patrons.
About Palm, Inc.
Palm, Inc. is a pioneer in the field of mobile and mobile and wireless
Internet solutions and a leading provider of handheld computers, according to
IDC (December 2000). Based on the Palm OS(R) platform, Palm's handheld
solutions allow people to carry and access their most critical information
with them wherever they go. Palm(TM) handhelds address the needs of
individuals, enterprises and educational institutions through thousands of
application solutions.
The Palm OS platform is also the foundation for products from Palm's
licensees and strategic partners, such as Franklin Covey, Handspring, IBM,
Kyocera, Sony, Symbol Technologies, and TRG. Platform licensees also include
Nokia and Samsung. The Palm Economy is a growing global community of
industry-leading licensees, world-class OEM customers, and more than 145,000
innovative developers and solution providers that have registered to develop
solutions based on the Palm OS platform. Palm went public on March 2, 2000.
Its stock is traded on the Nasdaq national market under the symbol PALM. More
information is available at http://www.palm.com.
Palm OS is a registered trademark and Palm Reader and Palm are trademarks
of Palm, Inc. or its subsidiaries.
This press release contains forward-looking statements within the meaning
of the federal securities laws, including statements by Palm and other parties
about the growth in the use of eBooks generally and the growth of the use of
eBooks in the consumer, enterprises and education sectors, the release of
eBook titles by both Palm and other publishers, the release of Palm's m500 and
m505 products, Palm's continued support of Palm Reader for the Pocket PC
platform and the ability of eBooks to provide increased productivity for
users. These statements are subject to many risks and uncertainties,
including those related to the integration of peanutpress.com, Inc.'s
technology and employees into Palm's operations and infrastructure, possible
development or marketing delays with the products or solutions to be offered,
potential defects in the products or solutions to be offered, the public's
acceptance of eBook technology and demand for eBooks and related products or
solutions, continued access by Palm to existing book and magazine titles and
increased access to additional book and magazine titles from publishers,
Palm's ability to publish new Palm Reader versions of additional book and
magazines titles, licensing of Palm Reader book development tools by other
publishers and users and publishing of book and magazine titles in Palm Reader
format by publishers, continued access by Palm to Windows CE development
technology and other risk factors described in Palm's quarterly and annual
reports and other filings with the Securities and Exchange Commission.
FAQ for peanutpress.com Acquisition
The Acquisition
Q: What is Palm announcing?
A: Palm is announcing the acquisition of peanutpress.com, which, prior to
the acquisition, was the Handheld Products Division and a wholly owned
subsidiary of netLibrary, Inc. of Boulder, Colo.
Q: What exactly will Palm acquire?
A: The acquisition will include a web-based storefront featuring unlimited
shelf space, easy browsing and purchasing, and real-time eBook order
fulfillment. This storefront currently has approximately 2,000 titles from
many of the major U.S. publishing houses. Also included is the Peanut Reader,
which will now be known as the Palm Reader, a leading eBook reader application
for Palm OS handheld devices.
Q: What are the costs and conditions of the agreement?
A: The financial terms of the transaction are not being disclosed.
Q: What changes will be made?
A: The application, Peanut Reader, will be called Palm Reader. Palm has
acquired the entire group -- 17 employees -- which will be called Palm Digital
Media and will continue to operate from the current peanutpress.com
headquarters in Maynard, Mass., and will report to Mike Lorion, vice president
of Vertical Markets for Palm, Inc.
Q: What were netLibrary's reasons for selling its Handheld Products
Division?
A: netLibrary sold its Handheld Products Division for its own strategic
reasons. Please contact netLibrary directly.
Q: Why is this deal such a strategic deal?
A: One of the most popular eBook publishers and the most popular platform
for handhelds are uniting. peanutpress.com distributes an extensive selection
of popular fiction and nonfiction eBooks for handheld computers from top
publishers. With the greatest market share in the handheld industry, Palm is
a leading eBook platform for handheld computers in the emerging eBook space.
Q: Why is this important to Palm?
A: The multifunctional Palm handheld computer has moved well beyond
personal information management and into multiple areas, including consumer,
education, business and the enterprise. Palm, already the leading
manufacturer of handheld computers, now also becomes a leading eBookstore for
handhelds. Because of this vertical integration, Palm believes it is now in a
better position to influence and benefit from the future of the eBook space.
Q: What competitive advantage does Palm gain from the acquisition?
A: The acquisition makes Palm a leading supplier of eBook reading devices
and eBook titles, strengthening Palm's overall business model.
Q: Why do you think Palm can succeed in this fledgling industry?
A: For two main reasons -- Palm will continue to provide a great user
experience in terms of platform, as well as titles, securely available, as the
acceptance of eBooks grows. People have been reading on Palm handhelds since
shortly after the first Palm handheld computer came out. Forty-nine percent
of first-time buyers of eBooks from peanutpress.com made a second purchase
within 32 days; and 60 percent purchase four times a year or more. Customers
spent anywhere from a few dollars to several hundred. About two percent of
customers spent more than $500 per year. Palm believes that its acquisition
of peanutpress.com greatly enhances Palm's ability to grow the catalog of
titles offered for sale and expand the number of people exposed to eBooks.
Q: Why did Palm choose peanutpress.com?
A: There are a number of reasons, including the following:
* peanutpress.com is a leader in its space and has well-established
relationships with many major publishers.
* It offers a large number of titles.
* It provides a reading environment that is comfortable and user-
friendly with features that include images, bookmarks, annotations,
standard and large fonts, autoscrolling, user selectable screen
orientation and a page-oriented reading experience.
* It offers an eBook reader for handheld computers and PDAs that has
the most widely accepted and used digital rights management (DRM)
system for handheld devices.
Palm Digital Media/Palm Reader
Q: Are you announcing any new titles as part of this acquisition news?
A: Yes. At 12:01 a.m. EST, March 20, Stephen King's latest novel,
DREAMCATCHER, will be simultaneously introduced as a hardcover book and as a
Palm eBook. Until March 23, Palm will offer DREAMCATCHER for a special
introductory price of just $14.95 (U.S.).
Q: Can Palm Reader run on other PDAs?
A: Yes. Palm Reader can run on Palm OS handhelds using Palm OS 3.0 and
higher, as well as on Pocket PC handhelds.
Q: Will Palm continue to offer the reader for Pocket PC?
A: Yes.
Q: What kinds of eBooks are available?
A: Fiction and non-fiction -- the same books you would find at your local
bookseller or online distributor. Palm eBooks currently has approximately
2,000 titles, with new books added constantly.
Q: Isn't it hard to read on the small screen?
A: The text appears in the same font size and column width as people find
in daily newspapers.
Q: What's the average cost of a book (in U.S. dollars)?
A: The average price of a Palm eBook is about $7 (U.S.). Prices range from
as low as $2-$3 (U.S.), for short stories and some older books, to as much as
$20-$25 (U.S.) for some current bestsellers. Because the eBooks are delivered
immediately as electronic downloads, there are no shipping charges.
Q: Who is your primary competitor?
A: To our knowledge, there is no other company offering best-selling
titles from leading commercial publishing houses for handheld computers and
PDAs.
Q: What's the key difference between Palm Reader and other eBook readers?
A: Palm Reader has the largest potential customer base of any handheld
reading application available today. Eleven million Palm handhelds have been
sold to date.
From a technology perspective, we differentiate Palm Reader and Palm
handheld computers from single-function readers based on benefits such as the
convenience of owning one device for multiple functions, including reading
eBooks, the ability to operate on all Palm OS devices, the ability to secure
books based on an individual not a specific device, superior user interface,
long battery life and a large catalog of titles.
Q: How long does it take to download a book?
A: It usually takes less than 60 seconds on a 56k modem connection to
download the average Palm eBook.
Q: Who are your best selling authors?
A: Our current best-selling U.S. authors include Michael Crichton, Scott
Turow, Anne Rice, Michael Connelly and Stephen King. We also offer a monthly
or quarterly weekday subscription to the Wall Street Journal and several
magazines.
Q: How can I get the Palm Reader?
A: The Palm Reader will ship in the box with the newly announced Palm m500
and m505 handhelds along with two eBooks, Tarzan of the Apes by Edgar Rice
Burroughs and 12 Valuable Ways to Use Your Palm from Velocity Business
Publishing. Palm Reader can also be downloaded from the website
(http://www.palm.com/ebooks) for use on any Palm device running Palm OS 3.0
or higher.
Q: Is Palm Reader available in multiple languages?
A: Yes. Palm Reader is available in English, French, Italian, German and
Spanish. Palm eBooks in these languages will be forthcoming.
Q: Can Palm handheld owners listen to audio books? When will they be
able to?
A: Palm handheld owners cannot currently listen to audio books. We don't
comment on future products except to say that we are always evaluating
technologies that will enhance the user experience of our products.
The Technology
Q: How does digital rights management work?
A: All eBooks from Palm are encrypted to prevent the unauthorized
distribution of books. Using a credit card to make the purchase, a copy of
the book is created in real time and is unique to an individual. When the
book is opened for the first time on the person's handheld computer, he/she is
required to enter his/her name and credit card number in order to unlock
his/her personal copy of the book. This unlock operation only happens the
first time the book is opened.
Q: Are my transactions safe?
A: Palm uses the highest standard security measures available for the
Internet. peanutpress.com has been using these measures for more than two and
a half years without a single problem reported.
Q: Is my credit card number stored in either the eBook or device?
A: No. Your credit card number is not stored either in a Palm eBook, or in
a Palm handheld computer.
Q: What happens to my eBooks if I lose my Palm handheld, have a system
crash or want to upgrade to the latest version of Palm Reader?
A: Unlike some other eBook reading systems, eBooks from Palm are not
locked to the reading device. This means if you lose your device or upgrade
to another device, all you have to do is synchronize your new device to your
current user name. You can store your eBooks on your computer's hard drive,
and retrieve them whenever you like. Palm also keeps an archive of your
previously purchased eBooks so that you can download them again whenever you
need to (for example, if you have a hard-drive crash).
Q: How does it work?
A: When you buy an eBook, Palm delivers the eBook to your desktop computer
(PC, Macintosh or UNIX systems). Even if your Palm handheld is lost, your
eBooks are stored on your desktop computer. In the event of a system crash,
simply go to the Palm Digital Media website. Your books are always available
to you and can be downloaded again at no cost. Upgrading to the latest
version of Palm Reader is automatic with each purchase. Each Palm eBook
download comes with the latest upgrade.
Q: I already have Peanut Reader installed on my Palm. Will I have any
problems upgrading to the new Palm Reader?
A: No. If you download a copy of Palm Reader from the website
(http://www.palm.com/ebooks) install it, it will overwrite your previously
installed Peanut Reader without any problems.
Q: What other formats does the Palm Reader support?
A: It also supports the Palm Doc format, giving users access to a vast
quantity of non-copyrighted e-Texts from across the Internet.
Q: Does Palm Reader let you make your own eBooks?
A: Yes, there are tools available at the website.
Q: How many eBooks can I fit on my Palm handheld?
A: It depends on which Palm handheld you own and how much free memory you
have. The average Palm eBook takes up 300KB of space. You can fit about 40
to 50 eBooks on a new Palm m500 or m505 handhelds with storage card (16MB)
support, 15 to 20 eBooks on the Palm m105 handheld and 2 to 3 eBooks on the
Palm m100 handheld.
The eBook Space
Q: Why would people want to read books on a handheld?
A: Because of the convenience and instant gratification. People can carry
books with them to read anytime and anyplace that it's convenient.
Q: Why is Palm getting into the eBook space?
A: Palm is a pioneer in the eBook industry just as it was in the handheld
industry. No other platform has as many handheld units in use from which to
develop a viable eBook business.
Q: Isn't the public skeptical about eBooks?
A: The growing numbers attest to the popularity of eBooks. Skepticism has
been pointed mainly at dedicated eBook readers that perform only reading
functions for books and not other applications. eBook reading is one of the
many functions available with Palm handhelds.
Q: Will the public accept eBooks?
A: Our research indicates that the public will accept eBooks, and, in
fact, many Palm handheld users already have. The use of eBooks is expected to
grow along with the use of handhelds, especially in age groups where using
technology is second nature.
Q: Who are your customers?
* Consumers -- This is the target audience for fiction and non-fiction
leisure reading. Palm already has a strong presence in this space,
and Palm Reader is a very popular application for novels and business
books.
* Education -- This is a largely untapped area for eBooks and one with
great potential. Palm provides an ideal reading platform for
education. The Palm Reader can be used for a variety of reading
applications, including textbooks, study guides and classroom
handouts to name a few. We expect that students and teachers in K-12
schools and universities will readily adopt eBooks as more academic
books and materials become available in this format. Academic eBooks
are expected to span the curriculum and include specialty areas such
as law books, medical text, and SAT and GMAT preparatory materials.
An added benefit: eBooks will greatly reduce the number of books
carried in students' backpacks, which now weigh an average of 20
pounds.
* Mobile Professionals -- This is a fast-growing portion of Palm's
business. Mobile professionals and companies are rapidly migrating to
the Palm platform as a way to enhance their productivity. This area
is ideally suited to eBooks as more and more mobile professionals
want to stay current with the latest business information while
on-the-go. Palm Digital Media is expanding its offering of business
books because the demand is so high. Companies also can convert and
produce their own content for publishing to make manuals, training
guides and human resources materials accessible in an eBook format,
using Palm development tools.
Q: Where can I get more information?
A: You can get information at http://www.palm.com/ebooks.
This FAQ contains forward-looking statements within the meaning of the
federal securities laws, including statements by Palm and other parties about
the growth in the use of eBooks generally and the growth of the use of eBooks
in the consumer, enterprises and education sectors, the release of eBook
titles by both Palm and other publishers, the release of Palm's m500 and m505
products, Palm's continued support of Palm Reader for the Pocket PC platform
and the ability of eBooks to provide increased productivity for users. These
statements are subject to many risks and uncertainties, including those
related to the integration of peanutpress.com, Inc.'s technology and employees
into Palm's operations and infrastructure, possible development or marketing
delays with the products or solutions to be offered, potential defects in the
products or solutions to be offered, the public's acceptance of eBook
technology and demand for eBooks and related products or solutions, continued
access by Palm to existing book and magazine titles and increased access to
additional book and magazine titles from publishers, Palm's ability to
publish new Palm Reader versions of additional book and magazines titles,
licensing of Palm Reader book development tools by other publishers and users
and publishing of book and magazine titles in Palm Reader format by
publishers, continued access by Palm to Windows CE development technology and
other risk factors described in Palm's quarterly and annual reports and other
filings with the Securities and Exchange Commission.
SOURCE Palm, Inc.
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