Software giant Microsoft and top online retailer Amazon.com are teaming up to sell digital books.

Amazon would use a customised version of Microsoft's Reader software for downloading and displaying digital text on a computer screen or hand-held computer, the companies said.

Amazon, the No. 1 Internet bookseller, said it planned to open a digital bookstore in the future, marking its debut in the nascent industry, which has started building momentum in recent months as high-profile authors start making their works available online.

It is the latest such deal for Microsoft, which earlier this month partnered with Amazon rival Barnesandnoble.com Inc. to initiate the first major online store selling digital books.