Microsoft (NSDQ: MSFT) and Yahoo (NSDQ: YHOO) have confirmed that they have joined the Open Book Alliance, a newly formed group opposed to the Google Book settlement.

Amazon (NSDQ: AMZN) also reportedly joined the coalition, which is expected to make an announcement next week. Amazon, however, declined to comment. The Open Book Alliance is a distinct organization from the Open Content Alliance, a group with similar goals created by Yahoo, the In, ternet Archive, and many universities.

Last October, Google (NSDQ: GOOG) reached a settlement with the authors and publishers who brought a lawsuit against Google for scanning books for its search index without permission. The settlement awaits approval from the judge overseeing the case. The U.S. Department of Justice is also weighing whether the settlement merits antitrust action.

A fairness hearing to consider approval of the settlement is scheduled for October 7. The deadline for objections to the settlement is September 4.

The major areas of contention revolve around issues of privacy, exclusivity, and indemnification from liability. Critics of the settlement want Google to commit to: offering online readers the same privacy protection enjoyed by offline readers; an open registry system rather than one controlled by two publishing industry groups; and indemnification from copyright claims for those who want to scan orphaned works -- books for which the copyright holder cannot be found -- as Google has done.

In May, Google said that it planned "to build and support a digital book ecosystem to allow our partner publishers to make their books available for purchase from any Web-enabled device," showing that Google Book Search will become a platform for Google book sales. This presumably explains Amazon's reported decision to join the coalition opposing the settlement.

To Google, Microsoft's public opposition seems incongruous because the company shuttered its Live Book Search project last year "to focus on search verticals with high commercial intent, such as travel." "The Google Book settlement is injecting more competition into the digital books space, so it's understandable why our competitors might fight hard to prevent more competition," said Google spokesperson Gabriel Stricker in an e-mailed statement. "That said, it's ironic that some of these complaints are coming from a company that abandoned its book digitization effort because it lacked 'commercial intent.'"

Yet, there's incongruity too in Google's reluctance to brawl publicly with the company that it opted not to name in its statement despite the growing number of skirmishes that Google and Microsoft face across an increasingly broad number of markets.

Two years ago, Google engineers, product managers, and executives tended to downplay competition between the two companies, in part to blunt the efforts of journalists to highlight the corporate conflict. Google Docs, said CEO Eric Schmidt at the 2007 Web 2.0 Expo, doesn't really compete with Microsoft Office. Google Docs "does not have all the functionality, nor is it intended to have all the functionality, of Microsoft Office," he said.

Yet, with the City of Los Angeles weighing whether to replace e-mail and productivity applications from Novell and Microsoft with Google Apps, it's clear that competition between the two companies is real and a matter of high stakes. This has been evident too in Microsoft's opposition to Google's DoubleClick acquisition, its role in rousing the Department of Justice to derail the ad deal that Google last year planned to consummate with Yahoo, and its support for a broad antitrust case against Google.

Google insiders have acknowledged being surprised by the breadth of the opposition to the Book Search settlement and the company has recently been more energetic about making its views known.

In one contentious aspect of the settlement, privacy, Google has been unable to answers to satisfy critics because the settlement doesn't spell out the technical specifics the company claims must be known before commitments can be made. And other complaints about the settlement having to do with the registry are matters in which the publishing industry plaintiffs will have a greater say than Google.

What's clear at this point is that Google, its competitors, and its critics will be wrestling over the settlement until the judge finally rules in two months.

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