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The Penguin move should be seen not as corporate verdict on libraries, but as a reaction to Amazon's entry into the library market. When Overdrive was distributing content to libraries on their own platform, the publishers were able to view Overdrive, and libraries in general, as a counterweight to Amazon. But the extension of Overdrive lending to the Kindle flipped libraries into the Amazon column. That's the best way to understand the Penguin decision, though you won't see them saying that.