Nobody is more eager for literary kudos than the e-book community. This loose conglomeration of pioneers, small-business owners and dreamers was publishing e-books — content produced in digital format, to be read on a computer or on special electronic reading devices — long before New York publishing houses suddenly became enamored with the notion after Stephen King reportedly sold 400,000 copies of “Riding the Bullet” in less than 48 hours. And until two weeks ago, many in the e-book community had reason to believe that they would finally get that recognition Friday, at the Frankfurt Book Fair during the first annual International eBook Awards ceremony.

The four winners of the awards — for best fiction and nonfiction original e-books, and best fiction and nonfiction e-book conversions — will each receive $10,000, and the best overall original e-book (fiction or nonfiction) will receive a grand prize of $100,000. Perhaps more important to an industry that has been laboring in obscurity, the winners will also gain the attention of publishing’s major players during its most prestigious international conference, a gathering where the rights to books, often by authors of world renown, are sold.

But on Oct. 2, when the Microsoft-sponsored International eBook Award Foundation (IeBAF) announced its 12 finalists, those hopes were dashed. Almost all of the books on the shortlist were by acclaimed print authors from big publishing houses: bestselling writers such as Colleen McCullough and Stephen Ambrose and lauded newcomers such as Myla Goldberg. The nominee list set off a wave of fury and corporate conspiracy rumors among the e-literati. They see the awards both as another example of big-time New York publishing arrogantly claiming to have the last word on what constitute good books and as a scheme by Microsoft to make sure that whatever e-book revolution may lie in the future will be owned by the world’s largest software company. For e-publishing doyenne M.J. Rose, the announcement set off a 24-hour phone marathon that resulted in her establishing the first Independent e-Book Awards to reward the vanguard of the digital word.

The controversy over the IeBAF awards and the birth of its grass-roots alternative (which Rose hopes will become the “Sundance of e-books”) highlight some pressing issues for e-publishing — issues that have so far gotten lost in either idealism about the freedom it may give authors and independent publishers or eagerness on the part of the established book industry to stake its claim in a new medium. Will e-books offer a way for writers who’ve been snubbed by the big houses to find success marketing their books directly to readers? Or will e-publishing simply present the same books and authors currently found in bookstores, only in a different, less tangible form? Will mainstream publishers’ newfound interest in the e-publishing scene bring a higher standard of literary quality and professionalism to a community that until now was amateur in the best and worst senses of the word? Is a small bastion of independence being stamped out, or are e-book readers finally going to get content they find truly enticing?

Martin Eberhard, co-founder and former CEO of NuvoMedia (creator of a reading device called the Rocket eBook and a cosponsor of the IeBAF), and now an Independent e-Book Awards judge, believes the roots of the conflict are as simple as “Microsoft buttering up the big publishers so that the big publishers will, in turn, make [Microsoft's] books available. It was supposed to be an independent award that Microsoft was just helping to get going.”

Rose says her awards are based on her idea of the electronic form as a means “to debut and grow new authors, to bring back the midlist, to give a real opportunity to authors who write between genres or for niche audiences, and [are] for innovators who envision books becoming multimedia experiments.” The objective is to “recognize the true pioneers and creative minds,” Rose says.

Mary Wolf, publisher and editor in chief of the four-year-old Hard Shell Word Factory, an ever-growing, genre-driven e-publisher, thought that the Frankfurt eBook Awards were supposed to “be a way to highlight electronic publishing. We thought it was going to give us a chance to compete on an even field. I really believed that until I saw the list of judges, all New York publishing people.” Wolf and many other e-publishers assumed that their authors would be competing against one another, as they did in the first annual Eppie Awards in August, sponsored by the Electronically Published Internet Connection. Hard Shell Word Factory won in seven out of 15 Eppie categories — and not by having its first-time romance, horror and mystery writers go up against a literary darling like Zadie Smith, whose novel “White Teeth” was converted from print to e-format and thus became an IeBAF finalist.

“When Bill Gates first announced the creation of the IeBAF, all the e-authors I know — and I know at least 2,000 of them — were all really excited,” Rose recalls. “Then I saw the list of judges, none of whom are at the forefront of this new industry, and most of whom are very much entrenched in traditional publishing, except maybe James Gleick [author of "Faster"]. I lost my great expectations.” Eberhard seconds this disappointment, revealing that “NuvoMedia stood next to Microsoft [at last year's Frankfurt Book Fair, when the establishment of the IeBAF was first announced] and volunteered effort and time and money, and we were excluded from any say about how the judging was done, or from contributing to the selection of judges.”

The IeBAF judges are largely culled from the print world; they include literary scout Maria Campbell, Parade magazine publisher Walter Anderson, Library of America president Cheryl Hurley and writers Henry Louis Gates Jr. and Daniel Boorstin. In contrast, Rose points out, the Independent e-Book Awards panel consists solely of people dedicated to e-books, who aim to “recognize excellence in electronic books, hypertext and digital storytelling” (the three fiction and nonfiction categories for the Independent e-Book Awards).

Many of the Independent e-Book Awards judges also boast a profile in print publishing; for example, New York Review of Books co-founder and former Random House editorial director Jason Epstein and literary agent Loretta Barrett are among the 14 judges Rose has enlisted in the past week. The luminaries in the e-book world include former Yahoo executive and e-book author Seth Godin, Foreword magazine editor Mardi Link and Electronic Literature Organization executive director Scott Rettberg. Rose will also serve as one of the judges, turning over the organizing reins to Sunny Ross, co-creator of the Mystic-Ink writers community in California. The group will be soliciting original e-books exclusively from independent houses, which can send in up to two entries per category, and unlike the Frankfurt eBook Awards, the Independent e-Book Awards will include self-published writers.

It is rare at this point for e-books to get review or media attention, the two things the e-community most desperately craves. Rose reports that the Independent e-Book Awards “are geared around attention, not money.” The short-fiction finalists will be published by Random House Audible, a digital spoken-word imprint of Random House; first- and second-prize winners will also get reviewed in Foreword magazine; and the winners’ works will benefit from a media campaign. The awards ceremony is scheduled for spring 2001.

The IeBAF has a different vision of its mission, albeit a vision that is still being shaped. Its priority, judging director Peter Mollman insists, is not to boost what has already been done in a still nascent form, but to demonstrate that e-books can and should measure up to the standards of “p-books.” “No one was trying to promote the big guys or anything like that. The idea of not representing the community — that really never came into our minds as we were setting up the judges. The only criterion we were looking for in the judges was an ability to be a great critic, a great evaluator of quality and independent of mind.”

According to Mollman, the IeBAF judges, who limited entries to e-publishers that produce at least 10 e-books per year to filter out self-published works, found that the submissions just didn’t measure up to the works of authors already established in the old media. Alberto Vitale, former CEO of Random House under S.I. Newhouse and the chairman of the IeBAF, thought “the purpose of what we have done was to put the spotlight on this new technology, and that, I think, we have achieved.” Vitale sees “a major literary component to these awards, and if I’m going to put my name to it, I want to give a prize to quality, and not the opposite of quality.” The implication is that if there are great books out there that aren’t being picked up by big New York publishers, then e-publishers certainly aren’t doing a better job of finding them.

Mollman says the judges also saw little evidence of valuable technological innovation in the books submitted to the IeBAF this year. Few, if any, capitalized on the medium’s ability to support hypertext links and graphics. He says the judges were all “disappointed. We believe that publishers — all publishers — should take advantage of the technology and have their e-books be more than just straight print-to-screen extensions. We recognized that this year, everything was new, so we stuck with literary quality.”

There does seem to have been some confusion as to exactly what the IeBAF’s mission is. Rose attributes the bafflement and annoyance on both sides to “a complication in what they [the IeBAF] expected and what they said they were going to do. What I wondered was, did the best original e-book mean the best-quality fiction? Or did it mean the best quality plus marketing plus innovation? Nobody made that clear.” It certainly threw Phil Rance, managing director of Online Originals (England’s first and only e-publisher to date), for a loop. Online Originals submitted 12 titles, “picking the books that we thought were the best quality of our work to demonstrate our range, and show that we were publishing a variety of different works.”

Mollman acknowledges the lack of clarity in the IeBAF’s intentions. “This was an inaugural year for the awards, and this issue is one of the things we need to correct for 2001.”

For Online Originals author Patricia le Roy — one of the more successful e-novelists, whose debut “The Angels of Russia” received a positive review from London’s Times Literary Supplement and was subsequently published by Piatkus Books in the U.K. — the IeBAF’s selection of judges didn’t hamper her enthusiasm, at least not at first. Before the finalists were announced, le Roy believed that the Frankfurt awards “had the potential to become as important as the Pulitzer or the Booker.” But afterward, le Roy was “scandalized to see a shortlist drawn up with such a frightening lack of imagination and cynical absence of responsibility. This prize is supposed to ‘extend the reach of reading’? To whom? A few benighted souls in cyberspace who might not have heard of Ed McBain?”

The quality of the finalists also didn’t strike Rance as particularly distinctive. “They appeared to me to be B-list experiments from the major publishing houses (predominantly Simon & Schuster, which published four out of the 12 finalists).” Rance suspects that “the prize is on the side of defending the status quo, which is hardly surprising, as the main sponsors will want to align themselves with the major incumbent publishers.”

Hard Shell’s Wolf sees it that way, too, and thinks “those titles aren’t original e-books. Those are print books that were brought out in electronic form quickly, to make them eligible for the award.” In one instance, McBain’s eligibility as a finalist for “best fiction work originally published in e-book form” was called into question because the Simon & Schuster Web site listed the hardcover publication date for McBain’s “The Last Dance” as four months earlier than that of the e-book edition. But as Steve Zeitchik reported last week in the Industry Standard, Simon & Schuster’s Adam Rothberg declares that “the Web listing was a mistake.” Nevertheless, if the IeBAF doesn’t amend its rules, or include e-book industry members next year, Wolf vows, she will not “enter our books for the award.”

Philip Harris, founder of the literary Electron Press, publisher of Village Voice Washington correspondent James Ridgeway and political journalist and print author Danny Schechter, says he was suspicious about the IeBAF from the start, and decided not to submit any titles. “It’s a promotional thing, and your chances of winning are very slight. I would rather concentrate on getting more books out.” Doug Clegg, an Independent e-Book Awards judge whose fiction has been both published in print by mainstream publishers Tor and Dell and self-published in e-format, can understand why Harris and other e-publishers are wary. “It’ll just be a nice kudos for a major publisher that might be using e-books as a publicity and promotions exercise. I don’t want to see e-books become the ads for the paperback editions the way hardcovers sometimes become the ads for subsequent paperbacks.” Clegg predicts that “based on the nominations, these awards will have no impact on e-publishing.”

Other e-publishers see the conflict as something more venal than the clash between lofty literary standards and the desire to celebrate and promote ingenuity. It also represents the collision of a small, fairly intimate community of small-business people and authors with some large, intimidating corporations that want to secure a piece of what could be a substantial market. Book publishers don’t want to be taken by surprise, as the music industry was by the advent of the MP3 file format and Napster, which allowed users to download music for free.

One e-book luminary, who wishes to remain nameless, says that everyone in the e-community has been discussing the fact that Simon & Schuster, Random House and iPublish support Microsoft ClearType. “The books that have been picked as finalists are predominantly published by publishers who supported ClearType, so lots of people are saying that this is totally a corporate boondoggle, that this was a way to get Microsoft and those publishers a little more press.” The IeBAF’s Mollman finds no merit in this rumor. “The ClearType was sort of an add-on after the awards were way down the line. I think most of the award submissions that we got were in Rocket-eBooks, Glass Books and SoftBooks.” Mollman insists that the Frankfurt awards “were not set up as a promotion for Microsoft. The awards were set up for the promotion of e-books.”

That’s not what indie judge Eberhard thinks. “The whole awards thing is distorted, and Microsoft hijacked the awards for its own benefit. I was talking to Alberto Vitale three or four months ago at a conference, and he pointed out that basically his paycheck is paid by Microsoft. To me, that’s saying it without saying it.”

If indeed a battle has begun, the spoils are still fairly hypothetical. A recent survey by Seybold Research indicated considerable reader resistance to the new format — only 12 percent of respondents said they were “likely” to spend money on an e-book or e-book device, and only 12 percent would read a book for pleasure on a personal digital assistant, or PDA, such as a Palm Pilot. Today, e-book reading devices (such as the recently unveiled REB-1100 and REB-1200 from Gemstar) cost between $199 and $600, and many e-books from the big publishing houses tend to be more expensive than the hardcover editions. According to Publishers Weekly, there are only 20,000 e-readers in the general populace to date, and the top e-book sellers tend toward science fiction, technology, business and romance — not exactly book-award-winning fare.

Currently, Rance of Online Originals admits, “e-book sales are pretty low, but they have doubled this past year. I think it is the technology.” To his mind, the problem has to do with the fact that “people have grown up reading books, and many people find it hard to believe that you’d want to consume text in any other way. We’re talking about a new medium, in the same way that video is different from cinema. Different types of genres and writing will emerge from it.” Eberhard couldn’t agree more. “The whole beauty of e-publishing is that it allows so many more books to get published, and allows publishers to take chances on books that they wouldn’t otherwise do.”

But first e-books have to catch on with consumers, and Rose doesn’t think that will happen until reading devices come down in price. Rance pinpoints quality as another issue. “We need to be giving people content that they really want — that’s why Stephen King was so successful. He was giving readers something that they wanted, and they couldn’t get it any other way. If you look at what’s available at most e-book sites at the moment, even at the Barnes & Noble Web site, you don’t go, ‘Wow, I’ve got to have that!’”

A cursory survey of e-books available from independent e-publishers reveals works by first-time authors whose imaginations and ambitions inspire them to meld too many genres into one narrative (call it innovative, or just the inability to find a sales handle) or whose writing often simply isn’t good enough to capture the enthusiasm of New York publishing houses.

And so far, p-book authors have been slow to flock to independent e-publishers. But that is slowly changing. Online Originals has just signed up a series of five new short stories by Frederick Forsyth, bestselling author of “The Odessa File.” “This is something of a coup for us,” says Rance. “It’s really the biggest name author to have done anything exclusively on the Web since Stephen King.” Novelist Fay Weldon is following suit, publishing her latest work, “Woodworm,” in serial form through the political Web site yougov.com, with no plans to publish it in print. Eberhard predicts that “as the e-book market grows, more and more writers will begin to experiment and publish this way.”

It remains to be seen how either awards ceremony will impact book buyers. Eberhard suspects that members of “the IeBAF will likely ignore the Independent e-Book Awards. They’ll act like theirs is the real one.” But he’s confident that the Independent e-Book Awards “will be one of the valuable tools that readers will look at to select what to read. This award will garner some prestige, for it encourages those things about e-books that make them unique. It’s got to encourage creativity in the way e-books allow creativity, and it’s got to encourage the creativity of the publishers, or even [these publishers] taking chances … that paper publishers wouldn’t do.”

Rose wholeheartedly agrees with Eberhard. “Frankfurt just isn’t the thing that I think our industry needs. While the International eBook Awards are an important first step, there’s room for another kind of show — the Independent e-Book Awards. I think the small publishers and authors desperately deserve and need it.”

(UPDATED BELOW)

Politicians and corporations behaving badly: that’s one theme that emerges from the latest secret State Department cables released by WikiLeaks.

The new revelations don’t measure up to the seriousness of the alleged massacre of civilians by U.S. troops in Iraq that I delved into over the weekend. But they are still very much worth noting.

A cable from 2008 titled “Mayawati: Portrait of a Lady” reports that the chief minister of India’s Uttar Pradesh state (the country’s most populous) once dispatched an empty private jet to Mumbai to procure her favorite brand of sandals:

Microsoft Corp. said Tuesday that it has agreed to buy the popular Internet telephone service Skype SA for $8.5 billion in the biggest deal in the software maker’s 36-year history.

Buying Skype would give Microsoft a potentially valuable communications tool as it tries to become a bigger force on the Internet and in the increasingly important smartphone market.

Microsoft said it will marry Skype’s functions to its Xbox game console, Outlook email program and Windows smartphones. The company said it will continue to support Skype on other software platforms.

The news that for the first time in 20 years, Apple’s quarterly net profit — $5.99 billion — has exceeded Microsoft’s — $5.23 billion — is remarkable for a couple of reasons. First, there’s the fact that the massive success of the iPad has pounded the market for consumer laptops and notebooks running Windows.

From Bloomberg:

Consumer PC shipments dropped 8 percent in the quarter, Microsoft Chief Financial Officer Peter Klein said. Netbooks — the cheap laptops that became popular during the recession — plunged 40 percent, partially because of defections to tablet computers, he said.

Technology titans Nokia and Microsoft are combining forces to make smart phones that might challenge rivals like Apple and Google and revive their own fortunes in a market they have struggled to keep up with.

Nokia Corp., the world’s largest maker of mobile phones, said Friday it plans to use Microsoft Corp.’s Windows Phone software as the main platform for its smart phones in an effort to pull market share away from Apple’s iPhone and Android, Google’s software for phones and tablets.

Ray Ozzie gave me hope for Microsoft. When he joined the software behemoth after it bought his collaboration-software company, Groove Networks, he brought qualities to the executive suite that Microsoft sorely needed. The most notable was an appreciation that the software world was moving toward models of cooperation with others as much as plotting their ruination. He was considered a potential, even likely, successor to Steve Ballmer, the only other CEO Microsoft has had besides Bill Gates.

So much for that idea. Ozzie’s departure, announced today in a weirdly low-key manner, shows that Microsoft is still struggling to define itself for the Internet era.