In Inkling Habitat, the company’s founder and CEO, Matt MacInnis, sees an opportunity to take the digital reading revolution beyond Amazon and Kindle. He believes Amazon is totally reliant on text-based titles that make up only a fraction of the total book publishing market, and calls Apple’s iBooks Author — free software that’s supposed to let anyone create interactive ebooks for the iBookstore — a flop. “Our message to the industry is that the first bit of digital publishing was great,” he told me, “but the real stuff is just beginning.” It’s early days for Inkling, which has only 400 titles in its store so far compared to Amazon’s millions of Kindle titles. But MacInnis is convinced that the next step is illustrated: Textbooks, travel guides, cookbooks, how-to books, and so on. And it’s this area, he believes, where Inkling — not Amazon — will dominate.

As I reported last year, Habitat “lets publishers create interactive e-books with HD video, interactive features and 3D content in a free, cloud-based program. E-books can immediately be published to iPad [and now the iPhone] and the Web in HTML5, with updates pushed to both platforms at once…Multiple groups can collaborate on the content simultaneously, so a production editor in New York City can look at the same project as a designer in India, simultaneously.” Starting Tuesday, publishers using the platform can also export their books as EPUB files, so that they can sell them through Apple’s iBookstore and other platforms. And each book created on the platform is fully indexable by Google.

Eight months ago, MacInnis told me, the cost of taking content from a print-destined file and turning it into structured content that can be crawled by Google or easily navigated on an iPad was $30 to $60 per page. “We’ve gotten that down to $3 a page,” he said. The tool is free for publishers and consumers, though Inkling will take a 30 percent cut of each sale through the Inkling store. Beta clients included O’Reilly, Frommer’s, Workman, and Wiley; new publishing partners announced Tuesday include HarperCollins, DK, Lonely Planet, Rick Steves Kaplan and Time Inc.

Inkling is also launching a subscription enterprise product, intended to compete with Adobe, that allows clients to build products under their own brands on top of Inkling’s APIs. Clients at launch include Pearson, the world’s largest book publisher; Elsevier; and Wolters Kluwer. Presumably, the enterprise clients’ subscription fees help keep Habitat free.

Finally, Inkling is rolling out an academic model of Inkling Habitat, which is completely free and doesn’t take a cut of sales. The company is partnering with the 20 Million Minds Foundation, which is backed by the Bill and Melinda Gates Foundation and will distribute 50 free, open-source textbooks to community colleges in California.

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Inkling says the launch of its “Content Discovery Platform” is a way for publishers to make their ebooks “more discoverable and profitable.” The company also wants to reduce readers’ reliance on Amazon as a tool for book discovery. “Amazon has way too much market power,” Inkling founder Matt MacInnis told me. “They control the discoverability of consumer content. They end up making or breaking a project for a publisher.”

Inkling is fighting back not by trying to “build a storefront overnight that is another Amazon.com” (though the company does sell its titles online) but by making all of its ebooks completely searchable through Google. When a user clicks on an Inkling Google search result, the relevant part of the book opens in Inkling’s web-based reader. The user can then preview the ebook’s content (up to five clicks are free), buy it in chunks or buy the whole book. The company is bullish on selling ebooks by the piece because it primarily works with publishers of practical nonfiction — cookbooks, travel guides and how-to books, along with textbooks — that can be chunked easily. In a version to be rolled out in a few weeks, users will be able to tweet the content and share it on Facebook.

You probably recall that Google has tried to harness the power of book search before — and, in MacInnis’s phrasing, “got its face sued off” because it tried to do so without the permission of publishers and authors. (Check out my colleague Jeff John Roberts’ ebook on the Google books lawsuit and settlement.) But Inkling has secured all of the rights it needs to make books indexable on Google. Client publishers include O’Reilly, Wiley, Workman and Pearson. HarperCollins will soon make some of its titles available on the platform, and MacInnis said that Inkling is either in negotiations or has signed contracts with the remaining big-six publishers. In addition to the 400 titles available on the platform now, the company says it will add about a thousand more over the next year.

MacInnis described Amazon as a “black box” that doesn’t give publishers data on how their books are being discovered. He also claims that Inkling’s Google initiative will bring publishers new readers. “We’re going to bring people in before they ever get to Amazon,” he said, claiming that “the vast majority of people who buy content on Amazon are just disgruntled Google users” who couldn’t find the book content they needed from a search engine. Amazon is also working to improve its own search, of course, and a search performed on Amazon.com will also scan the contents of books for which publishers have enabled the “Look Inside the Book” feature. But Inkling is structuring its content for Google search, which it says will provide better and more useful search results.

Of course, for Inkling to draw any users away from Amazon, it has to make sure its content is rising to the top of Google search results. MacInnis said that will happen because Inkling’s content is high-quality and ad-free, delivering “higher search happiness” that users will reward with clicks. But “we have to do a lot of work over time to establish domain relevance for Inkling.com,” he said, “and establish rank for key titles and key components of titles that we think will drive sales.”

Inkling has raised over $30 million in funding from backers including Sequoia Capital.

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Update, 5:00 PM: Skift reports that Frommer’s is laying off the entire Frommers.com team, while “the Frommer’s book editors will be moving from Hoboken’s waterfront to the the Zagat floor at Google’s offices in New York’s Chelsea neighborhood. The Frommer’s Unlimited staff, which is made up of a number of UK residents both in the U.S. and in offices in London’s Brick Lane, will be phased out according to more complicated UK labor laws.”

–

Google is buying the 55-year-old Frommer’s Travel Guides from publisher John Wiley & Sons for a reported price of $23 million. The business has been up for sale since the spring.

The Wall Street Journal reports:

The deal is expected to close shortly. Google hasn’t yet decided whether the Frommer’s guidebooks will continue to be published in print or whether they will eventually migrate entirely to online. It is also possible that the Frommer’s brand could be melded into the Zagat brand.

Google acquired Zagat for $151 million in September 2011 and made all of the brand’s listings free through Google+ Local in May.

Frommer’s has published over 300 guidebooks since its founding in 1957 and also includes Frommers.com, which has some travel content available for free. In addition, Frommer’s recently partnered with iOS publisher Inkling to make seven of its titles available in interactive digital editions for iPad and iPhone. Wiley — like other practical nonfiction publishers — has struggled to make its content profitable in an era when a massive amount of travel content is available free on the internet through sites like TripAdvisor.com. While Frommers.com has forums and user reviews, it is unlikely to be anybody’s go-to web destination for travel content.

Wiley announced in March that it was selling Frommer’s along with other consumer lines like Webster’s New World dictionaries and CliffsNotes. Revenue from the combined assets up for sale was around $80 million for fiscal year 2012, with Frommer’s making up an undisclosed portion of that. Wiley’s fiscal year 2012 revenues totaled $1.78 billion. In a release confirming the Frommer’s sale, Wiley reports that “proceeds from this sale, and others that may arise from the sale of other consumer assets, will be redeployed to support growth opportunities in Professional/Trade; Scientific, Technical, Medical, and Scholarly; and Global Education businesses.”

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Inkling’s interactive ebook publishing platform, Habitat, also now supports iPhone.

Inkling is based in San Francisco and backed by Sequoia Capital as well as major textbook publishers like McGraw-Hill and Pearson.

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But now a German company called PaperC is trying something new. It’s running with the idea of try-before-you-buy textbooks and taking it further by offering users not just the chance to buy a whole book, but also a particular chapter or even just a page.

Soon it plans to add a monthly subscription option that gives unlimited access.

The idea of buying a single page may sound odd, but it makes a lot of sense in the context of textbooks, where readers often don’t need the whole manuscript. And PaperC’s approach to free previews is similarly sensible: where Amazon shows you the opening chapter or two, this startup lets its users choose which 10 percent of the book they’d like to see without paying (they have a time limit on how long they can look).

PaperC has a search engine and a web reader that allows annotations and sharing, and has partnered with Sony on optimizing its tablet experience. Most importantly, the Leipzig-based firm already has 120,000 registered users and around 100 content deals with publishers like O’Reilly, Pearson, Wiley and others.

“PaperC is not only a bookstore but a library, offering its users a full suite of tools to facilitate their research,” international content manager Bill Glucroft told me, adding that while PaperC’s market so far is in German-speaking countries and eastern Europe, more than half the service’s content is in English.

All sounds fine so far, but here’s an extra twist: the company’s looking for more funding, which it hopes to obtain through an auction-based crowdfunding platform called Innovestment that’s quite interesting in itself.

Here’s the pitch (in German with English subtitles):

PaperC hopes to raise between €50,000 – €100,000 ($61,000 – $123,000). With the campaign already underway for a week, it has already amassed almost €16,000 through the sale of 14 silent shares – with each share representing 0.04 percent equity, the auction currently has the company’s total valuation at €2.6 million.

But hold up. Investors won’t be getting a share of the existing PaperC.de platform, which is based on PDF technology. They’ll be buying into PaperC.com, its HTML5-based successor (shades of Inkling). This is a bet on future value, rather than a chance to get a chunk of what already exists.

“We need additional resources to continue acquiring high-quality content from major, international publishers,” Glucroft said. “Moreover, we want our from-scratch-built HTML5 platform to be the best platform out there for buying, reading and working with academic eBooks. That means giving it the same set of interactive and study-friendly features that our PDF-based platform at PaperC.de already has, and having the ability to convert PDFs of our choosing to ePub, so they can be compatible with PaperC.com.”

PaperC is also working on raising its profile with U.S. and Canadian universities, he added.

The company fits into two notable strands of the Berlin scene: the e-reading bunch, as typified by Readmill and Txtr, and the academia-facing likes of ResearchGate.

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The firm got its start by making investments from Senkut’s pocket and later raised a $41 million fund to invest in early stage companies. Since then, the firm has added two new investment professionals – Renata Quintini and Sundeep Peechu. With almost 29 exits – both big and small – under its belt, raising a new fund wasn’t too difficult for team Felicis.

While the past fund garnered investments from institutional investors and individuals such as Peter Thiel and Gmail creator & Googler Paul Buchheit, the new fund has attracted institutional money from the likes of Rockefeller University (endowment) and Tencent. Institutional investor participation was at 92% in this new fund.

If mobile applications and e-commerce were the big focus for the first institutional fund, then this time the company is looking at new emerging categories such as 3D printing and bio-informatics. “The next Facebook won’t look anything like Facebook,” says Senkut, who believes the big opportunities lie in bio-informatics.

Senkut says his firm doesn’t chase trends or “what’s hot” and instead takes a more longterm approach to sectors that are ripe for fundamental innovation. A perfect example, he says is Inkling, which is tapping into the fundamental re-imagining of the idea of education.

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In addition, publishers using Habitat, Inkling’s e-book publishing platform, can make their books available for the Web simultaneously.

Books automatically sync between the Web and iPad. Inkling for Web is initially only available on Google Chrome and Safari.

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Titles include popular undergraduate textbooks as well as specialized MBA, medical and scientific titles. Students can purchase the entire textbook or “‘Pick 3′: a cost-saving alternative that allows students to buy just three chapters for a fraction of the price of a full textbook.” Then they can read the textbooks on the Inkling iPad app or on Inkling’s soon-to-be-launched web platform.

Inkling, based in San Francisco and backed by Sequoia Capital as well as major textbook publishers like McGraw-Hill and Pearson, recently launched its own e-book publishing platform and sells consumer titles as well as textbooks.

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Inkling already powers a number of iPad book apps, including the Culinary Institute of America’s “Professional Chef” and Open Air Publishing titles like food52 Holiday Survival Guide and Speakeasy Cocktails. The Frommer’s titles — seven of them at launch, with at least a dozen more rolling out by the end of the year — will be available for iPhone as well as iPad and cost $9.99 or $14.99 (depending on the size of the destination) in the iTunes store. The titles launching today are among Frommer’s bestselling guides in print — Costa Rica, France, Alaska, California, Japan, Spain and Great Britain.

The guides include lots of retina-optimized photographs — most of which Frommer’s hadn’t been able to fit into its print guides before — and features like interactive guided destination tours and interactive maps, notebooks with shared notes and web links, and real-time weather. Users can make their notes public so that other users can see them — “like Trip Advisor layered on top of the curated content,” Inkling CEO Matt MacInniss told me. The authors of the guidebooks will also publicly share notes within the app. Users can choose which other users they want to follow. “We think this social piece is going to be pretty popular,” MacInniss said.

The iPhone and iPad apps sync, so travelers can peruse the books and plan on their iPads and then refer to their itineraries and notes from their iPhones once they’re traveling. Maps and other features are available in offline mode so they don’t eat up data.

Web versions of the guides will be available this summer.

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“Apple (NSDQ: AAPL) spent a year and a half to build eight textbooks,” Inkling CEO Matt MacInnis said. “In two years, we’ve built 200.” Inkling Habitat is available immediately to a “select group of publishers” in an early adopter program, and will be available to everyone later this year.

Inkling Habitat lets publishers create interactive e-books with HD video, interactive features and 3D content in a free, cloud-based program. E-books can immediately be published to iPad and the Web in HTML5, with updates pushed to both platforms at once. (Well, iPad is available now and Web publishing will be added later this year.) Multiple groups can collaborate on the content simultaneously, so a production editor in New York City can look at the same project as a designer in India, simultaneously. Every version of a product is saved, so changes can always be rolled back.

O’Reilly is a partner at launch. iPad publisher Open Air has already released three titles using Inkling Habitat technology, though the program has not been formally announced until today.

The program is free, but in order to use it publishers must agree to make the books they create with it available through Inkling’s store (in its iPad app and on its website). Inkling takes a cut of the revenues from those books. Unlike with iBooks Author, publishers can also sell the books they create through other channels (their own websites or as individual apps, for instance) and Inkling does not take a cut of those sales.

McInnis demoed the product for me and it looks very easy to use. It’s key for not just publishers but laso the digital content producers they work with — often, teams in India — to know how to use the platform. Inkling has already partnered with the two largest digital content producers, Aptara and Innodata, to train them and they are now ready to use it.

My first job out of college was at an independent publisher, and one of my tasks was to FedEx gigantic stacks of printed book files, marked up with red pencil notes and Post-Its, to a design team in India. (This was in 2006, not that long ago!) It was incredibly nervewracking, from my point of view — the packages got lost or sidetracked somewhere in India more than once, which I swear was not my fault — and just the process of sending them back and forth took forever, even though both our team in New York and the producers in India were working quickly.

Being able to log onto a cloud-based program, manipulate files directly, send notes to designers, publish immediately and always roll back if you make mistake is a total lifesaver — and may be regarded that way by publishers who have been wary to publish interactive e-books because it is so expensive. Also, because Inkling Habitat doesn’t charge for the platform but relies on a revenue share of the finished product, the company has an incentive to work with publishers throughout the proces. “Their win is our win,” said MacInnis, “and their failure is our failure.”

Inkling is based in San Francisco and has raised $17 million in funding.

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