From Forbes:
Barnes & Noble has had a troubled few years. Part of the problem is that it continues to be a tablet business with a chain of bookshops connected to it rather than the other way around – with the tablet and ebook reader business growing at a savage pace, while the bookshop dawdles.
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Here’s an interesting idea: that Barnes and Noble should consider splitting the company. Separate the physical bookstores from the virtual business of the Nook and allow that digital business the room and capital to compete with Apple‘s iPad and Amazon’s Kindle?
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From the stock market’s view, from the investors’ view, this is pretty much a no brainer. We would always prefer to see businesses broken out rather than hidden in some conglomerate. Unless there is a substantial reason why the two businesses work better together than apart that is.
It’s not entirely obvious which way this goes though. Does having the Nook advertised throughout the retail estate raise awareness of its existence enough to make the argument that the two should continue to exist in the same company? Could even that be unbundled: say, a 5 year agreement as part of the separation of the two businesses?
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By adding Jana Partners’ involvement this week there is the potential for an even more convoluted deal. Jana owns a significant piece of McGraw Hill and has been pushing for its breakup as well, separating the text book publishing business from financial services
If the Nook, through the Jana connection, could be sold with a captive textbook market place, courtesy of McGraw Hill, as well as an arms-length bookshop relationship with Barnes & Noble, the deal has the potential to create a mini-Amazon, and through internationalisation, a genuine force in eBooks as well as in tablets generally.
Link to the rest at Forbes
It’s interesting to PG that Big Publishing is so focused on protecting Barnes & Noble’s bookstores while all the financial wizards are anxious to dump the bookstores so the real value of the Nook can be realized.
PG suspects the Nookies secretly regard the bookstores as a boat anchor around their necks, despite the short-term benefit of having sales space in them.
Just a thought: At least dividing the assets would be easy. Barnes can have the barns, and then Noble gets the Nook.
The real question is, why would anyone want to own shares in Barnes’ barns?
Just a wonky little note–the Forbes blog is quoting an article in the Register: http://www.theregister.co.uk/2012/04/29/investors_circle_barnes_and_noble_as_it_plans_nook_spin_off/
These calls for a split always make me wonder. Because I do not believe Nook would have had a prayer of getting anywhere near the piece of the pie they’ve managed to carve off were it not for them being displayed and pushed in the B&N retail stores. What better place to sell an ereader could you come up with. Not only a constant stream of regular readers for potential customers, but you get a face to face shot at showing all those readers who’ve heard of kindle and brushed it off because they are intimidated by technology that maybe it’s not so confusing as they feared. And all this despite the fact that pushing Nook devices isn’t really in the long term interest of the retail store employees.
And if they split … do they split the website? If they managed to make a better site, that would of course be good, but if they’re just going to run two crappy sites instead of one… hmm.
Good points. I think the only reason the Nook was able to make headway against the Kindle was the opportunity to try out the Nook in the stores, get help if necessary, etc.
The problem is that the book stores are becoming boat anchors. Ideally, you would keep the Nook business together with the retail stores until the moment the stores finally began to pull the company down, then split off the Nook business and let the stores sink, Unfortunately, you can’t be certain you can call that moment correctly and you may have problems pulling the Nook out cleanly if the stores go into bankruptcy shortly thereafter.
I love my Nook Color.
Support at BN stinks. It’s not great for a Fire either, actually, as I proved last week going up 3 tech support levels in an afternoon.
You can buy a Kindle or a Nook at Walmart. You don’t need a big building for that.
What they need is great tech support and a couple videos that explain everything.
If I can figure it out, it’s not that complicated.
Right now the Nook and digital content is Cinderella before the ball to BN. If they took it seriously, then they could compete.
BN can do whatever it wants with the physical buildings.
Nook should be split off and become a content provider.
And there are cool reading devices that people can buy from them as well with a coupon for 10 ebooks and neat skins.
Be the content provider.
Because actually Amazon isn’t although they seem to be.
Hire a couple famous editors from NYC. Hire coders. Create Nookling books for children. Create Nooklettes for shorts/singles. Welcome new content providers, treat them like gold, give them gold.
Love this! I hope BN is listening…
Why should they start now? 🙂
P.G.
Before my FIL bought me the Ipad, I was thinking seriously about the Nook. I’d heard a lot of good about it. However, I made enquiries and the $1500.00 or so of books I had bought on the Kindle were now toast, can’t be read on the Nook. Unless I were to get creative with busting the DRM.
I couldn’t care less about the shops. I honestly haven’t purchased anything in bricks and mortar for years other than groceries. Publix/Costco is it.
I realize that is a consumers only viewpoint, but the tide has long passed for Barnes and Noble for me. I only ever went there once, was nice, great big queue. There was an Olive Garden nearby:)
brendan