The battle over e-book sales heated up as Internet portal Yahoo! Inc. signed an e-book sales deal with four major publishing houses.

E-books are a tiny part of the current online book market, but both publishing companies and online retailers clearly are expecting significant growth in this sector. Both Amazon.com and Barnes&Noble.com have had e-book sales areas for some time. The market reaction was less than enthusiastic over the deal, as Yahoo!'s stock was down $1.08 in mid-morning trading to $10.62, and at one time touched a 52-week low of $10.53. Yahoo!'s deal is with Penguin Putnam, Simon & Schuster, Random House and HarperCollins. Financial terms were not disclosed, but Yahoo! is expected to get a piece of each sale at the e-books site.. The books division of AOL Time Warner is not participating. Virtually all book categories are represented on the site, including recent bestsellers, mysteries, thrillers, romance, science fiction, desktop reference books, college textbooks, travel and business. The deal give the publishers a neutral ground, so to speak, in which to sell their books, and allows them some direct contact with online buyers. Rob Solomon, general manager of Yahoo! Shopping, was quoted by the New York Times as saying that e-books are part of the company's plan to build a business as a distributor of digital media by capitalizing on its "neutral status, like Switzerland." Since Yahoo is not part of a major media company, it can provide a venue for rival media companies to sell digital books, music and video together, he said.