There is not much detail about this story beyond what reads like press releases. According to the NYT article, Amazon has no intention of changing anything about Stanza. That includes its ability to download free books and purchase books from participating services. One of those services, Fictionwise, was recently purchased by competitor Barnes and Noble.
I am excited to see competition in the field of electronic books but I am worried that consolidation is happening so quickly. Usually consolidation spells an end to innovation. I am hugely concerned that the fledgling, and open, eBook format, ePub, is going to be a casualty of this first round of shakedown. While Amazon is allowing books without DRM into its closed Kindle eco-system, unlike its audiobook counterpart Audible, their overall commitment to open formats and supporting the choice of the creator is not encouraging.
Innovators like Stanza, Feedbooks, and Fictionwise have been establishing toeholds on a wide variety of devices while the larger players like Amazon and Sony slug it out with their proprietary devices and formats. ePub had the potential to emerge as a de facto standard much as MP3 did. At this was true so long as the heavy weights remained ignorant to the proven market power of being as widely compatible as possible. Unlike the MP3 format, about which the best feature is just that it lacks DRM, ePub is an open format without, as far as I know, patent encumbrances. It is morally more closely related to Ogg Vorbis in that respect.
Unlike Ogg Vorbis, which has been well adopted by those interested in freedom from intellectual monopolies, ePub has been gathering potentially effective market forces to help drive its acceptance. My worry is that Stanza’s acquisition may dissipate enough of that momentum to olbiterate any such potential. I remain open to being proven wrong.