Scribd to sell 5,000 e-books from Simon & Schuster

Scribd, the site that lets users upload, share and embed documents, first launched its e-books store back in May as a potential competitor to Amazon. Now it has inched closer to its goal with a deal to sell 5,000 titles from major publishing house Simon & Schuster in the form of digital e-books.

Many publishing houses are shopping around for new online distribution opportunities. E-books may have only generated $100 million in revenue last year, but they are the fastest growing category in the industry as book sales slow. Spying an opportunity, Scribd is about to release an application to make the books it sells readable on the iPhone. Users who purchase books through Scribd can also save them as unprintable Adobe Acrobat files, readable on any computer.

Interestingly, they will work on Sony’s new e-book reader, but not on the enormously popular Amazon Kindle. This move could position Scribd as a credible rival to the site, or it could make it the equivalent of a company that only provides music for non-iPod music players.

The deal with Simon & Schuster will give Scribd titles from authors like Stephen King, Mary Higgins Clark and president Jimmy Carter starting Friday, June 19. This is the first time the publishing house will offer e-books at a discounted price, knocking off 20 percent for those who buy through Scribd. In most cases, this still won’t make books as cheap as they are on the Kindle, which prices most best-sellers at $9.99.

Scribd users can find these books using the site’s search-and-browse tool. Thousands of the newly available titles have never appeared in e-book form. This should establish Simon & Schuster as a significant presence in the e-book space, benefiting from Scribd’s userbase of 60 million unique viewers. On the other side of the agreement, Scribd gets an infusion of professional books to supplement its mostly amateur, cheaper offerings. The company takes a 20 percent cut of each sale.

Scribd has raised $13 million in capital to date from Charles River Ventures, Redpoint Ventures, Kinsey Hills Group and Y Combinator.