I'm a few days late on this one but it's been a busy week!

Google announced Monday that by the end of the year it would allow publishers to sell eBooks directly through Google. Google was already involved in the eBook/eReader market through its patented book digitization efforts and through a partnership with Sony that offers 500,000 public domain books for free in the Sony Reader store.

We expected that Google would move more aggressively into the eReader space, but the move to sell eBooks directly is surprising. Sure, there's Froogle, and Google Checkout, but Google doesn't really sell anything but ads. Even when it could have moved from displaying search results to selling products–like airline tickets–it hasn't, until now.

This move directly threatens Amazon as an eBook seller, but more importantly, it challenges Amazon's whole proprietary approach to the eBook market. Google eBooks will use open standards and can be used on any reader, unlike Amazon's Kindle format. Google will also let publishers set their own pricing, unlike Amazon.

What's next for Google? We wouldn't be surprised to see an Android-operated eReader, one that syncs with Google docs and is optimized for reading business documents in addition to books and news. In addition, specialized eReaders are seen as a potential enabler of paperless hospitals; Google's involvement in digitizing health records could put Google in a central role in the health eReader space.

And of course, if anyone can figure out an ad model for books, it's Google…