There’s an old Murphy’s Law that says, “The day you decide to sell your soul, you’ll find souls are a glut on the market.” That seems applicable to Barnes and Noble, which has been searching for a buyer for months without much luck. Bloomberg reports that it seems likely B&N will end its search without finding a buyer.
According to sources close to the bidding, a major reason for bidder reluctance had to do with B&N’s e-book sales in light of competition from Amazon’s Kindle—prospective bidders were concerned that it might take too long for Barnes & Noble to generate more digital sales. I wouldn’t be surprised if the hoopla surrounding Borders’s bankruptcy also had something to do with making buyers leery of getting into the same market as Amazon.
That hasn’t stopped B&N execs from making rosy predictions about the future of e-books. CNN’s Fortune section reports that B&N exec Mark Parrish predicted that e-books would begin overtaking printed books within the next 24 months (though he subsequently said he didn’t meant to put a specific timeline on the shift). Industry research reports predict that 20 times as many e-readers will be sold in 2011 as in 2009, and that before long readers will begin preferring e-books to print. (Found via Gadgetell.)
It’s not clear whether the lack of a purchaser is going to have immediate consequences for Barnes & Noble. There have been no signs of impending bankruptcy as with Borders. One Borders shareholder, Ron Burkle, wanted to purchase a majority stake in the company, but founder Len Riggio managed to stymie his attempt.
How serious an offer was this though? There are those who believe the only corporation Riggio is willing to sell to is Riggio & Co.
Regarding B&N’s digital sales: I own a Kindle, a Nook Color and a Kobo. When I buy books for the Nook, I buy them from Kobo because they can then be read on the Kobo, the Nook or even a Sony should I happen to get one of those. B&N has some proprietary thing in their digital books which prevents them from being read on another reader. Their digital sales might increase if the books could be read on other readers.
Mary has got it exactly right. If B&N really wants to corner the EPUB market, they could. They need to remove their special DRM from their ebooks so they can be used on any EPUB compatible device. OR (ha!) other ereaders like Kobo, Sony etc. need to recognize and use the B&N EPUB format (which they could, but why should they). If B&N does not do something with this format problem, it will probably mean their demise and I would hate to see that happen, as I own a nook, but like Mary I don’t buy nookbooks — unless someone has given me a B&N Gift Card. I have purchased an EPUB from the Google eBookstore because it is more versatile in the long run. Otherwise, I borrow EPUBs from my local library and read them on the nook. I have a real hard time understanding B&Ns lack of business strategy and business sense. What are they thinking??
In the world of business, no one buys a company when it is sliding. It just doesn’t make sense, unless someone sees some potential others don’t see. In the Publishing industry there doesn’t appear to be much innovation or forward thinking so it’s unlikely such an entity will appear.
Potential buyers sit back and let it slide. B&N have been talking up eBooks and their own potential .. but clearly the industry thinks it has further to fall. Management doesn’t seem to be much good, so the slide will likely continue. if if it gets close to bankruptcy, then no one will buy either because the creditors are still in line. Bankruptcy will clean up the creditors schedule and only then will potential buyers jump in if they think the name and assets make it worthwhile.
The Epub market is riven by incompatible DRM, but DRM is rock bottom on the list of what’s wrong at Barnes. Anyway B&N would have to set its sights pretty low if it wanted to corner the Adobe ‘classic’ DRM market, considering that it is unlikely that that segment makes up much more than ten percent of the ebook market in the USA. In fact B&N has a larger share of the market than all of its Adobe rivals put together.
Its problems are many but they all come down to the fact that all of the (shrinking) profit is coming from the stores while bn.com continues to show a large loss.
Don’t forget that B&N is only useful for individuals with a US address. Otherwise it is a completely useless company since they won’t sell to anyone else. They can only market to a maximum of 400 million people (and of those, more than 40 million fall below the poverty level which decreases purchases of non-essential items like ebooks). This is approximately 6% of the world’s population (current world clocks put us at 7 billion). Frankly, most of us don’t give a sh*t about B&N since it has absolutely no bearing on our ebook reading habits since we have never been, and will never be, customers of them. At least Borders was a company that had a presence outside of the US.
If digital books are the future how can you say it doesn’t matter. Obviously it is a question of old out dated bricks & mortar model and an inability to capture significant epub digital book market by locking their ebooks to their devices.
A previous TeleRead post by Paul had some good ideas for B&N. Here is the link back to it: http://newteleread.com/wordpress/paul-biba/making-bn-number-one/
MarkChan, you can still shop at Barnes & Noble even if you don’t live in the US. Just use package forwarding to get your own US address and forward your packages internationally. (Works with any seller, of course, not just B&N.) Check out http://bit.ly/gs0Zvk
@Reid – your post confuses me:
1. B&N ebooks require a credit card with a US billing address.
2. Why would anyone order physical goods from B&N and pay a freight forwarder:
“To ship from our US office to a US destination, we charge a flat fee of $20 on top of the rate posted by UPS, plus a fuel surcharge. To calculate the UPS shipping rate, please click”
Here, you are not only paying for B&N to ship to the forwarder, but then you need to pay another shipping fee for + a large surcharge to get your stuff from the forwarder. Instead, you can order from Amazon.com and get free shipping. How does that make B&N relevant to the international community.
B&N carries no exclusive ebooks that you can’t get from another ebook vendor. Most of the world wouldn’t even notice B&N’s disappearance. The only individuals who would notice would be those that bought into their DRM scheme that doesn’t work on ANY other device. I can’t even feel empathy for those individuals who bet their entire ebook library on B&N DRM’d books.