1.Websites which offer free internet library?

Question

2.How books are searched and read on internet library?

Answer 1

Project Gutenburg (named after the printer) is the oldest and offers a lot of great literature:
http://www.gutenberg.org/wiki/Main_Page

Bartleby offers a lot of information, including poetry and reference works:

http://www.bartleby.com/

Those are probably the two best and how you search depends on the website.

Now, if you are looking for books still undercopyright, that's different. Some public and school libraries offer access to their patrons to a particular site where you can "check out" electronic versions and download either pdf or audio versions which become inactive after the "loan" period.