Here's an interesting historical footnote: Yesterday was the 10th anniversary of B&N shutting down their first ebookstore.
Barnes & Noble was one of the first big players in the US ebook market and had signed contracts with Microsoft and Adobe to sell ebooks their formats. In fact, they had launched B&N's ebookstore in 2000 with a splashy free ebook offer.
But after 3 years, ebooks just weren't generating enough revenue. US ebook sales were estimated to be around $5 million in the first half of 2003. According to the Open eBook Forum, that was up from $3.8 million in the first half of 2002.
The AP covered the story at the time, and they got this quote: "We did not see sales take off as we and many others had anticipated," Daniel Blackman, vice president and general manager of Barnes & Noble.com, said Tuesday. "The other factor is that consumers haven't embraced the technology. There isn't widespread adoption of an affordable and an easy to use e-book device."
Barnes & Noble won't get back into ebooks until 2009, when they end their 6-year hiatus by purchasing Fictionwise and eReader.com, and then using the tech to build the Nook Store.
Amazon, on the other hand, was selling PDF and MSReader ebooks in 2003 and they never stopped. Instead Amazon started throwing money at the technical problems and pricing problems. They bought Mobipocket in 2005 and used the tech to build the Kindle Store, which launched in 2007.