Barnes & Noble Weighs Its E-Reader Investment

[AnemicOak]

Originally Posted by taustin

Microsoft already owns a pretty big chunk of it, don't they?

17.6%, and Pearson owns 5%.

[caleb72]

I had just assumed that Microsoft would take over the device aspect. I would have thought there needed to be some strategy to Microsoft taking a chunk of the business, but maybe the strategy lies elsewhere.

[fjtorres]

Originally Posted by caleb72

I had just assumed that Microsoft would take over the device aspect. I would have thought there needed to be some strategy to Microsoft taking a chunk of the business, but maybe the strategy lies elsewhere.

People are overestimating Microsoft's investment in Nook.
Mostly they needed ebooks for the Windows content store. Music, video, and apps they have so Amazon was not the best fit, while B&N has ebooks and diddlie squat. Plus a honking big need for cash. So MS reached into petty cash.
They have a use for Nook but it is tactical and not strategic. It may not be a one night stand but it isn't a lifelong commitment either.
The investment has already lost a chunk of value so don't assume MS is going to throw good money after bad to prop up Nook. There's still Kobo out there...

[MV64]

I'm still a little confused with the Microsoft investment. I don't see why people think they would want to buy the Nook outright. They already have Surface tablets and produce their own product. Like people said, the investments, as far as I can tell, were merely for access to content.

[WillysJeepMan]

Originally Posted by MV64

I'm still a little confused with the Microsoft investment. I don't see why people think they would want to buy the Nook outright. They already have Surface tablets and produce their own product. Like people said, the investments, as far as I can tell, were merely for access to content.

That's because nobody (outside of Microsoft's executives), not you, nor I, truly knows the motivation for Microsoft's investment in B&N's Nook.

Investing to get access to content is speculation. It's a reasonable thought, but not more than any other theory. There are far more financially effective and efficient ways of getting access to content than investing in the company.

It could've been to get access to patents without telegraphing to competitors which patents they were interested in.

It could've been for tax purposes.

It could've been to send a signal to specific competitors.

It could've been to generate interest, buzz, and speculation. Given Microsoft's lengthy track record of poor ad campaigns, they received more attention from this investment than if they had spent money directly on a marketing campaign.

It could've been the result of losing a bet at a dinner party.

[Rev. Bob]

I say let B&N drop the Nook (and its weird DRM) altogether and start carrying the Kobo line. The marketplace doesn't need, nor do I think it is supporting, two such similar hardware lines. Amazon needs competition, B&N needs Rakuten's network, and Rakuten needs B&N's name recognition.

[fjtorres]

Originally Posted by WillysJeepMan

It could've been the result of losing a bet at a dinner party.

Could be.
It would be less embarrassing than Ballmer having to do the monkey dance again.

Thing is, Microsoft has been known to make investments in all sorts of busineses that they don't have any interest in buying. Often when they partner with them. They do have $50 billion burning holes in their pockets...
One time they settled a lawsuit over vibration in gaming controllers by buying a chunk of the company. In the end, Sony ended up paying more than MS and MS got some Sony money.
http://en.wikipedia.org/wiki/Immersion_v._Sony

In this case, B&N *owed* MS a chunk of money from the patent suit settlement and since they had little cash to pay with, an investment was a way for MS to get their pound of flesh without crippling B&N. And they did need a source of ebooks for the WinTabs...

But it doesn't mean they'd want the whole kit that comes with the ebookstore. They might decide to go with Kobo, instead.

Or, for all we know, they're just buying time until they can set up their own ebookstore.

[bgalbrecht]

I've been hoping that B&N will put out a second generation Nook Glow that has comparable specs to the Kobo and Kindle equivalents, but these all these negative news reports make me start to doubt it.

[fjtorres]

Oh, I'm fairly sure we'll see a 4th gen Nook. Should be fairly sweet.
4th gen tablet? Not likely.
Not if the $21M in december returns from channel partners were really the new models, as reported.

[bla]

One of the problems was the issue of getting b&N ebooks to run on other devices.. if you are Amazon you could maybe do this but even amazon didn't try... to force customers to buy a Kindle.. I bought one book from B&N and spent a long time getting it so it would run on the T1.. ended up having to strip the drm and jump through hoops to get the thing to load.. properly I never went back to the B&N store... pity.. they had some titles I couldn't find elsewhere

[VydorScope]

Originally Posted by bla

One of the problems was the issue of getting b&N ebooks to run on other devices.. if you are Amazon you could maybe do this but even amazon didn't try... to force customers to buy a Kindle.. I bought one book from B&N and spent a long time getting it so it would run on the T1.. ended up having to strip the drm and jump through hoops to get the thing to load.. properly I never went back to the B&N store... pity.. they had some titles I couldn't find elsewhere

Amazon is the same exact way. They both have platform lock in.

[charmian]

Amazon is the same way, but from what I hear, Kobo and Sony are not, though. What's the point of even using Adobe's DRM if you can't use the books on other ereaders? (Assuming that this is indeed the case: I keep on hearing conflicting things)

[hwlester]

Originally Posted by charmian

Amazon is the same way, but from what I hear, Kobo and Sony are not, though. What's the point of even using Adobe's DRM if you can't use the books on other ereaders? (Assuming that this is indeed the case: I keep on hearing conflicting things)

If they use Adobe's DRM, it can be used cross platform (Sony, Kobo, Copia, Google Play, BooksOnBoard and others). B&N's readers support Adobe DRM, but B&N uses their own DRM for books they sell. So... you can buy books from many places and use them on the Nook (and Sony, Kobo, etc.), but books bought from B&N can only be used on the Nook (unless you strip the DRM). Amazon uses their own format with its own DRM, so books bought from them can only be used on the Kindle (unless you strip the DRM and convert them).

[murraypaul]

Originally Posted by VydorScope

Amazon is the same exact way. They both have platform lock in.

Yes, but Amazon is .... good at it.

[fjtorres]

Originally Posted by charmian

What's the point of even using Adobe's DRM if you can't use the books on other ereaders? (Assuming that this is indeed the case: I keep on hearing conflicting things)

The logic of supporting ADEPT on Nooks was for library books. And as insurance in case ADEPT really became a defacto standard. Odds are, if B&N had chosen not to support library ebooks, they never would have signed up with Adobe, as their entire approach has always been based on their hardware driving users to their ebookstore. And on brand loyalty. It worked, too.

Amazon's approach has *always* been primarily based on their ebookstore selling the hardware. (The K1 was kludgy, ugly, and ergonomically sub-par. It still sold because of whispernet and the bookstore.) Since then they've refined the hardware but the prime attraction for most customers remains the ebookstore.