Shanda Interactive Entertainment has set up a new subsidiary, Guoke Electronics, to be in charge of the research and development of its new e-book product "Bambook".

According to reports in Chinese local media, Shanda is expected to integrate the resources of this newly established subsidiary with those of Shanda Literature, the Internet literature subsidiary of the company.

Prior to this move, Chen Tianqiao, chairman of Shanda, said during the company's recent conference that Shanda Literature will follow the example of Amazon.com and develop a new business model. Amazon.com launched its e-book reader product Kindle in 2007 and this has become a new growth point for the American-based multinational e-commerce company. So far, Sony and Google have tapped the e-book sector and Chinese companies such as Hanvon and Founder have also launched related products in China.

An insider close to executives of Shanda Literature has confirmed the launch of Bambook and said the product will have 3G and Wi-Fi modules, which enable users to download e-books from Shanda's online bookstore.