With “big five” publisher Macmillan and e-tailer Amazon putting the wraps on their new deal over the weekend, the wheels are being set in motion for the $9.99 e-book to meet an untimely demise by the time the iPad arrives late next month.

AppleInsider has a report today on the publishing shake-up which began only a day after Apple finally unveiled the fabled iPad tablet. Publisher Macmillan met with Amazon in an effort to switch their pricing to a more standard agency model similar to what Apple uses for the App Store. Amazon not only resisted, they pulled all of the publishers books from their store that weekend in retaliation.

Amazon finally conceded defeat on the matter a week ago and agreed to pay Macmillan higher prices for their e-books, and the final deal was sealed over the weekend. With Apple nipping at Amazon’s heels with the iPad, the stage is now set for big changes this year in the fledgling e-book market, according to The Wall Street Journal.

“By agreeing to accept a new pricing model, Amazon has publicly acknowledged the sudden emergence of a rival that may not only threaten its highly popular Kindle franchise, but also its total domination of e-books,” the report claims. Macmillan’s higher-priced e-books aren’t expected to come until late March, coinciding with the release of Apple’s new iPad.

Apple CEO Steve Jobs touted the company’s new partnership with the big five publishers, which includes Macmillan as well as Penguin, Simon & Schuster and two others that have now come forward to challenge Amazon’s e-book reign, Hachette and HarperCollins.

It’s now expected that when the iPad hits stores in late March, e-book pricing for new hardcover bestsellers will fall between $12.99 and $14.99 through the device’s iBookstore. Previously, Amazon took a loss on such titles in an effort to push the KIndle, paying publishers up to $15 per new release while they sold them to customers for only $9.99. Needless to say, Apple is not in the business of giving away its content at a loss, so Amazon has no choice now but to switch gears and follow suit.

The most interesting aspect of the new agency model is that the publishers will ultimately get less money per e-book than they were with Amazon, although the assumption is that the iPad will gain them a lot of new customers where they can make up that short-term loss with volume in the long-term. It’s going to be an interesting year for the e-book market, at any rate...