“Skiff will offer publishers a way to participate across the full value chain, from shaping publication design to selling advertising to maintaining subscriber relationships, so that they can better control their destiny as e-reading expands.” said Kenneth A. Bronfin, president of Hearst Interactive Media.

So just how does this work you might be asking your self, here it is in a nutshell.

First they are building it on a chip that can be integrated into any device. Interesting but not really certain how successful that will be given how fast hardware changes in our world.  Skiff has partnered with Marvell (NASDAQ: MRVL), to help them create the world’s first “system on a chip” for e-reading.

By supporting a variety of device makers, and through the development of complementary applications for major smartphone platforms, Skiff is hopeful that this will make it easier for publishers to distribute content and advertising broadly across multiple devices from a range of manufacturers.

How are they going to distribute this new platform?

Skiff has signed a multi-year agreement with Sprint (NYSE:S) to provide 3G connectivity for Skiff’s dedicated e-reading devices in the United States. Plans are underway to have Skiff readers available for purchase in more than 1,000 Sprint retail locations across the U.S., as well as online at www.sprint.com. Additional distribution channels will be announced next year. This partnership is Sprints attempt to recover after being pushed off by Amazon’s e-reader when they went global. Amazon did that because Sprint’s 3G technologies don’t work anywhere else in the world.

This strategy makes a lot of sense and is how Apple was able to innovate in the once stodgy telecommunication space with a struggling AT&T. Now Hearst and Skiff are trying replicate it again with the struggling Sprint.

How are they going to make money?

Why advertising for one thing, but for good measure a pay for content approach as well. The Skiff service includes an advertising system. Skiff is collaborating with publishers, leading advertisers and agencies to establish appropriate standards, formats and metrics for e-reading, and to validate them through consumer research.

Skiff is also partnering with Nielsen and comScore to help figure out media planning and buying through the Skiff platform, as well as to provide publishers and marketers the necessary analytics to measure the effectiveness of e-reading advertising.

But for good measure remember you are paying for the service to access the content and the question is still out there as to whether or not the consumer is going to play along.

Now I’ve thought about getting a Kindle and I haven’t because of the limitations of the device. If it gave me the Wall Street Journal exactly as I receive it today with color photos and added some multimedia or breaking news headlines off the web site in real time I would have picked one up.

Skiff seems to promise some of this so I will be waiting to see where they take this. If done right it could be the breakthrough device of 2010 and save the publishing industry with a real digital business model.