In 1971, Michael Hart, founder of The Gutenberg Project, acquired millions of dollars worth of mainframe use with no project in mind. It was near the 4th of July, and the groceries he'd bought had a free copy of the Declaration of Independence included with them. The ideas clicked in his head, and he typed up the Declaration of Independence on the mainframe that night, ready for free electronic distribution. By 2010, Hart and his foundation had made over 31,000 public-domain ebooks available for free download.
Except for Project Gutenberg, ebooks didn't grow much until the Internet became a commonly-used communication device and handy platform for moving electronic documents. In the 1990s, niche and small press publishers started producing ebooks for sale. Early ebooks were commonly either collections of classics or magazine back-issues, small targeted niches not cost-effective for print publishers and romance novels, especially highly erotic ones. Until 1998, there was no dedicated platform to read ebooks on; instead, they were read on ordinary computer screens.
By the late 1990s, viral marketers had also discovered the ebook. The concept of free books, cheap to produce and free to distribute, being used to support sales was irresistible. Within 10 years, ebooks distributed by marketers had become common and were even expected in some niche industries.
Ereaders--small handheld devices dedicated to reading ebooks--have been around since the Rocket eReader was released in 1997. However, since ebooks were such a small part of the market, few were sold. The first successful ereader was the Sony Reader. This ereader used electronic paper display for ease on the eyes, and came with 100 free classic ebooks.
Amazon invented the Kindle as a direct and improved competitor to the Sony Reader. Released in 2007, the Kindle could not only read ebooks, it accepted orders for new ones and instantly downloaded the book to the reader. In effect, the owner had a bookstore in his pocket. Most modern ereaders incorporate this technology.
By 2009, sales of ebooks had taken off. Multiple bookselling corporations were investigating ereaders they could use to boost sales.
Ebooks had been discovered by the large publishers in 1998, when Eric Flint convinced Jim Baen, editor of Baen Publications, to post old out-of-print novels by established writers on a dedicated website where fans could download them for free. The publishing industry as a whole scoffed at the idea, but Flint showed that sales on in-print books as much as doubled when fans could read older books for free. Today, Baen Books posts over a hundred novels for free download on the Baen Book Library, and provides many more as direct-from-the-publisher paid downloads.
Jim Baen wasn't the only fiction industry insider taking note of the new ebook trend. Stephen King published the first blockbuster novels available first in electronic form, "The Plant" and "Riding the Bullet." It sold extremely well, but King quickly grew frustrated with the limitations of electronic publishing and decided against further attempts.
Until the first quarter of 2008, ebook sales were flat and below $10 million annually. After the release of the Amazon Kindle and subsequent race to build the perfect ereader, sales of ebooks skyrocketed. In the first quarter of 2009, sales had doubled; by the end of that year, sales had doubled again, and the first quarter of 2010 showed accelerating growth even from the second doubling point. In 2010, it appeared that ebooks will be taking an ever-larger chunk of the overall book market share.