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Monday, May 13, 2013

Nook: From B&N To Microsoft for Cool Billion?

News is out that Microsoft is ready to offer B&N one billion dollars for their Nook ebook and tablet media business.

After this leak found its way into some speculative news media articles last week, B&N’s stock price soared --- All this comes about one year after Microsoft’s $300 million investment into Nook Media to bolster its faltering sales and expand Microsoft into new digital areas. This gave Microsoft about a 17% stake in Nook Media.

If B&N does divest itself of its Nook Media sector – what in the hell is to become of the struggling B&N? It begs questions such as what will B&N do with the one billion? Will they invest it in their brick-and-mortar shops and return to being primarily a purveyor of print and other sidelines? Hmmm.

AND can Microsoft, who actually was one of the first innovators of ebooks (remember?) with their launch of the Microsoft Reader in 2000, manage their foray into this sector better this time around?

Some interesting facts and insights provided by Dennis Abrams and Edward Nawotka in Publishing Perspectives:

If Microsoft Takes Over Nook, What Next?

Last weekABC News noted that Barnes & Noble stock prices soared afterTechCrunch reported that they had seen internal documents indicating that Microsoft is considering offering Barnes & Noble $1 billion to buyout the Nook Media business. Microsoft, after last year’s $300 million investment, already holds a 16.9% stake in Nook Media. Pearson, which invested $89 million in Nook Media and holds a 5% stake. In exchange for the additional $1bn, Microsoft would then redeem some of its shares in Nook Media, and take control of the Nook ebook and tablet business. According to TechCrunch:

The documents also reveal that Nook Media plans to discontinue its Android-based tablet business by the end of its 2014 fiscal year as it transitions to a model where Nook content is distributed through apps on ‘third party partner’ devices. Speculation about the plan to discontinue the Nook surfaced in February. The documents we have seen are not clear whether the third-party tablets would be Microsoft’s own Windows 8 devices, tablets made by others (including competing platforms) or both. Third-party tablets, according to the document, are due to get introduced in 2014.

But what are the implications of such a buyout for Barnes & Noble? Microsoft, while a technological powerhouse, has has been star-crossed when it comes to interacting with the book business.
Microsoft was one of the earliest companies to get into the ebook business, via the launch of Microsoft Reader, which debuted in August 2000. It was tied, in part, to the launch of Microsoft’s Tablet computers, the first on the market, and generally seen as a failure. The Reader software and its proprietary .LIT ebook format were discontinued in 2011. The company’s Live Book Search project — which had scanned 750,000 books and indexed 80 million journal articles — lasted just two years, from 2006 to 2008, before it was scuppered.
Should Microsoft take over Nook Media and opt to put an end to B&N’s own ereaders, where that will leave Nook is anyone’s guess. Windows 8, Microsoft’s latest release, has had a lackluster debut and adoption of their most recent Tablet computers incorporating this software have been lackluster.


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