NetLibrary Woes

What began as one of the more innovative, aggressive campaigns to bring e-books to the masses now appears to be meeting an all-too-familiar dot-com fate, as officials at e-book provider netLibrary confirmed that the company is searching for a buyer after failing to land a critical round of investment capital. As a result, the Boulder, CO, dot-com that offers libraries a way to loan e-books to their users, has had to cut back the salaries of remaining employees—including the company president—to $360 a month, about the same as unemployment benefits. NetLibrary officials say that the tenuous economic climate in the wake of the attacks of September 11 was largely to blame.

NetLibrary started in 1998 and sold its first e-books in the spring of 1999. Hundreds of university and public libraries—as well as a few K–12 school libraries— purchased netLibrary collections because there was no other way for libraries to loan e-books that didn't involve lending reader devices as well.

NetLibrary officials say at press time that if the netLibrary server is forced to shut down, libraries' e-book purchases will be protected by an escrow agreement with OCLC. However, not all customers, officials note, have the escrow agreement.