Amazon has dropped the price of the Kindle again, a move that InformationWeek says is pretty much in response to Barnes & Noble, Sony, Plastic Logic, and Asus. In particular, it comes after Barnes & Noble released its electronic reader, the Nook.

But the real reason Amazon is being so aggressive is because of the challenge ahead from Google which has announced the launch of Google Edition which will allow users to download electronic copies of books from Google or from publishers using its technology. That will put Google in full on competition with Amazon, and would threaten to chew into Amazon's market.

The problem for Amazon is that Kindle is too expensive. It's a damn sight cheaper to read a book on your smart phone, if that's what you are that way inclined.

Developments in the e-book space are very similar to what was happening in the cell phone market in the 90s. The technology just kept developing and the market took off. And of course, there were casualties (who can forget Motorola's ill-fated Iridium project?). Similarly, there will be casualties in the e-book space. It remains to be seen whether Amazon will be able to match it with Google.