Google just bought Ebook Technologies Inc. Now that was a smooth move.
This is a quiet little company that had been involved in ebooks since before the industry existed. I'm not kidding either. Garth Conboy, President and co-founder of ETI, used to run the Gemstar eBook Group (before Gemstar went bankrupt). He was even part of Nuvomedia back before Gemstar bought it. Basically Google just got themselves a Wright brother and his team (who is also a serial entrepreneur). Garth is also the former current head of the IDPF (the digital publishing trade group), which should give you an idea about his pull in the industry.
As for ETI, I have to confess that I haven't been keeping up on them. They haven't done any flashy public projects for a few years now. The last consumer product that I recall them working on was developing the firmware for the Ebookwise 1150. This was a several years old refurbished ereader with a HVGA touchscreen, 90MHz CPU, and 8MB RAM. ETI developed both the firmware and the file format for the ereader. They even managed to give it pen based annotation and a basic web browser. It was a pretty decent device at the time (2006).
ETI have also been active in developing the various ebook standards as set by the IDPF.
I would bet that ETI have done at least some of the development work for the Google Ebookstore. But I'm still waiting to hear back from Garth, so i don't know.