Britain's biggest supermarket chain, Tesco has acquired a new digital firm, Mobcast, which is a e-books platform.The acquisition will allow Tesco to better compete with its major rival, US online giant Amazon. Mobcast is -founded by author and former SAS soldier Andy McNab and it creates software for publishers and other users allowing them to deliver digital content.

Tesco had recently purchased internet radio service WE7 in June and digital-movie streaming service Blinkbox recently. Blinkbox directly competes with Amazon's LoveFilm. Even as Tesco is paying £4.5m for Mobcast but events say that the acquisition indicates to a trend for the UK retaining giant.

Amazon is dominating bookselling with a market share of more than 25 per cent in the UK and is also a big player in the music and electronics segment. Some indications are that Amazon might also move into groceries segment. Tesco is looking to compete with the American company in various segments.

Michael Comish, Tesco's chief executive for digital entertainment admitted that the almost all the retailers compete directly with Amazon for market share. Mr Comish Tesco did not yet have a big presence in e-books and the acquisition of Mobcast will help it inter the market.