Whatever pricing scheme it chooses, it seems clear that Google wants to come down on the side of being as open as possible — a choice likely designed, at least in part, to set the company’s service apart from the proprietary models of its main competitors. In a recent interview with Ken Auletta in the New Yorker, Google engineer Dan Clancy said that the company’s approach is designed to create “much more of an open ecosystem,” and that Google was “quite comfortable having a diverse range of physical retailers, whereas most of the other players would like to have a less competitive space, because they’d like to dominate.” But will an open approach pull in consumers who have grown used to the Kindle or the iPad and iBooks?
Google’s arrival on the scene is likely to give even more power to publishers, since they will gain even more leverage over Amazon (and to a lesser extent Apple). That will almost certainly make it harder for the company to try and bully publishers into accepting its pricing model. And if Google decides to go with the “agency model” as well, and allow publishers to set the price, that could leave Amazon without much of a leg to stand on. It’s not clear whether that will necessarily be good for readers, however — at the moment, Amazon is the only one pushing for lower prices, and the rise of the agency model threatens to give publishers more power than they had before, which could keep e-book prices high, at least in the short term.
I would suggest that Google’s open source emphasis isn’t just a case of differentiating itself. Google does have non-proprietary formats (GDocs, GCal), but there are clearly groups within Google that are trying to allow you to extract data (see Google’s “Data Liberation Front” group). A smarter next step for Google would be to use non-proprietary file formats based on XML, even if by allowing users to export multiple formats, this should not be an issue.