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The intent of this paper is to explore the future role of ebooks in the publishing industry. Emphasis is put on the impact it has on the supply chain of the industry. Issues dealing with the legal ramifications and financial implications, such as sales taxes, will also be addressed. The first section describes characteristics of e-books and the current developments in e-books from the consumer’s point of view. With the handling of the content of publications in digital form, intellectual property rights will become more complex and will require new regulations to deal with the new medium. These and other related legal issues are addressed in the third section. With the likelihood of utilizing the Internet for the distribution of the e-book to consumers, the collection of sales taxes will be difficult for government agencies to handle. The situation will be further complicated due to the globalization of the market place. Which policies are in effect, how will they are enforced, and who are responsible for their collection are emerging issues that will need to be addressed in the global and local arenas. Then it will be followed by the impact it has on the supply chain of the industry. For example, one of the benefits of ebooks is the reduction of logistical costs throughout the supply chain. Also, due to the ease of distribution, there most likely will be consolidation of certain levels within the supply chain. It may trigger a shift of competitive power among the various levels. The likely scenario of the future business environment of the publishing industry is discussed in the concluding section.