Barnes & Noble Aims to Sell Publishing Unit
From the Wall Street Journal:
Barnes & Noble Inc. has put its Sterling Publishing business up for sale, say people familiar with the situation, signaling a likely end to its decades-long involvement in the publishing of its own books.
The book retailer has been in publishing since the 1970s and expanded the effort in 2003, when it acquired Sterling for about $115 million.
Now, however, Barnes & Noble, facing intense competition from Amazon.com Inc., is recasting itself as a technology company with emphasis on its Nook e-reading devices and its Nook tablet. The sale of Sterling would allow Barnes & Noble to focus on its core businesses. A spokeswoman for Barnes & Noble on Wednesday declined to comment.
. . . .
In July 2009 Barnes & Noble consolidated a separate in-house publishing business into Sterling and laid off a small number of employees, citing a need for greater efficiency. The publishing house boasts an estimated 6,000 plus title base of e-books and print books, according to a Securities and Exchange Commission filing earlier this year. Its catalog includes more than 500 books in the Barnes & Noble Classics and its Library of Essential Reader series.
Link to the rest at The Wall Street Journal (Link may expire after a few days)
Passive Guy wonders how all the people assigned to the bookstores division feel about working for a technology company. PG also wonders why BN didn’t recast itself as an ecommerce company.
Maybe I don’t understand business as well as I thought, but it seems to me that this is a dumb move if the company wants to compete with Amazon. They’re one of the few companies that could easily transition into a competitor for Amazon’s publishing arm, and if they could sign a few high profile authors, they could supply content that Amazon wouldn’t have. I would think if they really wanted to compete with Amazon, they would be trying to expand their publishing arm.
Frankly, I don’t see how they can compete as a technology company. They don’t have the track record or product line, and they aren’t bringing anything new to the table (as far as I know). I love my Nook, but I bought it because there is a Barnes and Noble a couple of miles from my house, and if I have a problem, I can take it to a live person. If I lived where there isn’t a B&N, I don’t know that I wouldn’t have gone with a Kindle.
Or am I missing something obvious?
Just curious, Keith: have you taken your Nook to a live person at B&N? Are they actually able to help? I’m a little dubious about the quality of technical help from a bookstore clerk. I know when I was listening to Borders staff trying to sell Kobo readers in the stores, I would hear some jaw-droppingly bad info.
Some in-store clerks don’t know, but at least at my local B&N locations (there are 2), those clerks are pretty good about fetching the person who can help me or trying to find the answer in their manual.
I love my NOOK Touch, but their ebookstore could use some setup revamping. I have to find free titles by searching and arranging reverse by price.
I’m with you, Keith. What do I know about business? One thing I do know is, there is a universe of difference between asking, “How do we increase profits?” and “How do we become a better book store?”
I have a bad, bad feeling about the future of B&N.
Honestly, it seems like they’re more interested in the here-and-now profits and not the long term future.
I got a tweet an hour ago that B&N stock had dropped 30% after this announcement. It’s recovered slightly and is now only down about 23%. I hope they can recover from this, but since B&N looks more and more like a Borders from five years ago every time I walk in the door, I’m not holding my breath.
Do you really think they’ll last 5 years, though? I give them three, max…
On a scale of 1 to stupid, I’d put this decision at stupid… I think this will go the same way as betamax. The platform that has the most exclusive content will win. And this decision makes it less likely B&N will have the most exclusive content.
Besides, reality check here: B&N isn’t a technology firm. It will never attract the best geeks, it has no geek credibility. It is a bookstore. Books are what it does best. Abandoning that and competing against Amazon on its own ground is a good way to a whipping.
Agreed, Thomas, particularly about the geek cred.
Having worked in several tech companies, it always amazes me how many people think tech success is easy or accidental. BN is trying to move from physical bookselling, which, while not a prosperous niche, includes very few real competitors for them.
Instead BN wants to go head-to-head with Amazon, Apple and Google because . . . it’s easier to make big money competing with those guys than with Books-A-Million?
Ah a ‘Noble’ idea and all, but not a good one. This is just one more nudge towards Amazon becomming the next corperate overlord. On the other hand, I do like my kindle and Amazon still appears to have kept its soul. *shrugs*
I was surprised by this because Amazon just acquired Marshall Cavendish Children’s Books and is growing their publishing aspect. Maybe they are trying to compete by moving in the opposite direction? But I’m afraid that is just wistful thinking on my part.
PG,
It’s not just the publishing division. They are also looking to spin off the Nook:
http://online.wsj.com/article/SB10001424052970203513604577142481239801336.html?ru=yahoo&mod=yahoo_hs
Soo… they’re just liquidating their assets and getting out before it all collapses?
If one was to be cynical, one could view this as the investors making some money before it all goes belly up on the book side.
I think it’s quite possible that they don’t have the money to actually run this business and are looking to raise some quick cash….
I think they are in a tough spot. On the digital side, they don’t have the deep pockets to compete with Amazon, Apple, and Kobo (since they got bought out), as well as possibly Google (if they decide to take e-books seriously). On the book side, it’s all bleak.
I think the Nook could be a force, but only if a serious player buys it (and starts expanding internationally ASAP). Google would be a very interesting purchaser. I’m skeptical, though.
Yeah, Google would really have to start executing on e-books in a big way, which I don’t know that it would do–right now it’s definitely not committed to this new business. Kobo has its own reader, so I don’t know if they’d want the Nook. Even if they do, it might make more sense for them to wait and see if they can swoop in after B&N goes into bankruptcy (which is the problem trying to sell assets when you’re distressed–if people wait until you go under, they can get a much better deal).
Google did buy Motorola last year, so it seems as though they are interested in aquiring a business if it fits into their plan. I could see them buying Nook, handing it over to motorala for development into a fully functioning tablet with a strong link to google plus for sharing highlights, stuff like that.
I agree it makes sense on paper, but I’m less sure Google will do it. Remember, the main reason they bought Motorola was patents. Look at Google’s whole approach to mobile: they were “agnostic” towards devices and created an open platform. Considering Amazon used that free, open platform to create their own walled garden for Fire, they might be tweaking that strategy some, but I’m not 100% convinced.
They took a similar approach to e-books. They created a platform that indie bookstores could use, rather than trying to compete with them. They created a software platform that manufacturers could use (e.g. iRiver), rather than develop their own device.
On the other hand, Google are not above mothballing their own unsuccessful initiatives and buying a competitor wholesale (e.g. Google Video & YouTube).
If I was to bet, my money would be an international e-commerce giant/carrier making a move, rather than Google (much like the Kobo deal).
There are a lot of questions for any prospective purchaser of the Nook. What is going to happen to all those new, enlarged Nook display areas in the bricks and mortar B&N stores? What relationship will the newly separated physical business have with the independent digital side? Will the stores continue to provide support for the device? Will the stores still be around in a year anyway?
This is another example of the damage caused by DRM. The irony is that Amazon sold the music industry on DRM-free MP3s as a way of escaping Apple’s walled garden. Right now, every ebook vendor has to support both the reader and the format (and pay Adobe its vig). This favors Amazon and Apple, but leaves the rest with a steep cost of entry, perhaps too steep in the case of B&N.
[...] your shares by noon. Publishers were probably checking how their accounts receivable stood. Authors started imagining life without [...]
[...] your shares by noon. Publishers were probably checking how their accounts receivable stood. Authors started imagining life without [...]
[...] your shares by noon. Publishers were probably checking how their accounts receivable stood. Authors started imagining life without [...]