PREVIEW-Bigger Kindle e-reader may not be a newspaper fix

By Alexandria Sage

SAN FRANCISCO, May 4 (Reuters) - Amazon.com Inc's (AMZN.O) Kindle electronic reader was supposed to revolutionize publishing by freeing people from having to carry books around. Now the Web retailer may super-size it for newspaper readers.

Amazon plans to launch this week a bigger version of its Kindle, which may also house textbooks, analysts and media report. The New York Times said the new device could be unveiled on Wednesday and its parent would be involved.

But a larger-format e-reader may not be a quick fix for a struggling newspaper business devastated by crumbling ad revenue and declining readership. Nor would it guarantee a big boost to Amazon's bottom line anytime soon, analysts say.

Questions about whether such a device will host ads and how Amazon shares revenue, also pose key concerns, they say.

But a larger-format device could at least ease Amazon's entry into digital text books, which some have said represents the best guarantee of a steady revenue stream.

On Monday, the Wall Street Journal reported that the upcoming Kindle will be doled out to students at six colleges -- including Princeton -- starting in the fall.

It will also feature a more fully functional Web browser, the Journal cited people briefed on the matter as saying.

Spokesmen for Amazon and the Times declined to comment.