Updated from 3:47 p.m. EDT

Amazon

(AMZN) - Get Report

is looking to lure newspaper readers and students onto its

electronic book

technology with the Kindle DX, a device it launched Wednesday.

The online retailer took the wraps off its latest

e-book

offering in front of a crowd of journalists at New York's Pace University and is now eyeing a digital media revolution.

Capable of downloading books and other content via 3G wireless networks, the Kindle technology is touted as an alternative to traditional books, newspapers and magazines. The previous version of Kindle, however, offered a 6-inch screen, which was not well suited to viewing newspapers and textbooks.

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"The fact of the matter is that, even with electronic paper, you need a big display," admitted Jeff Bezos, the Amazon CEO, explaining that the Kindle DX's screen is just under 10 inches.

Other new features of the Kindle DX include a built-in PDF reader, a keyboard for creating annotations, and an expanded capacity capable of storing 3,500 books. The reader also comes with "auto-rotation," enabling readers to view content in either portrait or landscape mode, simply by flipping the device.

In addition to the Kindle DX, Amazon also announced a slew of partnerships Wednesday, which hinted that e-book readers could be here to stay. A handful of big-name newspapers, including

The New York Times

and

The Washington Post

, will offer the Kindle DX at a reduced price to readers who live in areas where home delivery is not possible and who sign up for a long-term subscription.

This move could be significant. With ad revenues falling, newspapers are desperate to cut their production costs and open up new online revenue streams.

Amazon is also taking aim at the lucrative textbook market with the Kindle DX, clinching deals with publishers

Wiley

,

Cengage Learning

and

Pearson

to offer their content through the Kindle Store.

Clearly looking to tap into the youth market, Amazon will also run trials at five U.S. universities, including Princeton and Case Western Reserve, to make the Kindle DX available to students. "This is such a dream," explained Bezos. "We're going to have students with less

in their backpacks, a lighter load."

At one point, Barbara Snyder, the president of Case Western Reserve University, joined Bezos on stage, explaining that she has high hopes for the Kindle trial.

"We believe that e-book technology has significant potential to change the way students approach learning," she said. "We will examine how it influences the way students read and take notes -- we look forward to seeing how they respond to it."

Despite Amazon's ambitious e-book strategy, the Kindle does not yet offer a color screen, and readers can expect to pay a premium for the DX. Priced at $489, Kindle DX is significantly more expensive than its $359 predecessor, the Kindle 2.

The company's decision to tap the youth market, could, however, prove key, and if Amazon can emulate even a fraction of

Apple's

(AAPL) - Get Report

success with its iTunes technology, then Kindle could bring in new revenue.

Some 35% of books are currently sold in a Kindle format, according to Amazon, which offers more than 275,000 books on the device.

"The Kindle vision

is that every book in every language will be available in less than 60 seconds," said Bezos. "We're making progress on that vision."

Amazon isn't the only company eyeing the e-book market, and could face stiff competition from

News Corp.

(NWS) - Get Report

, publishing giant

Hearst

and startup

Plastic Logic

, according to

The New York Times

. The Seattle, Washington-based firm could also come up against Apple's rumored

tablet

device.

Amazon's stock rose 9 cents, or 0.1%, to reach $81.99, despite a rally in tech stocks that saw the Nasdaq rise 0.28%.