In this paper, we discuss the issues related to word recognition in born-digital word images. We introduce a novel method of power-law transformation on the word image for binarization. We show the improvement in image binarization and the consequent increase in the recognition performance of OCR engine on the word image. The optimal value of gamma for a word image is automatically chosen by our algorithm with fixed stroke width threshold. We have exhaustively experimented our algorithm by varying the gamma and stroke width threshold value. By varying the gamma value, we found that our algorithm performed better than the results reported in the literature.