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Originally Posted by SensualPoet
I completely agree about the value Nook carved out of B&N brings to Sony ... and provided Sony actually leveraged their strengths instead of squandering them.
OTOH, if Sony were thinking of divesting itself of its ereader business, perhaps Rakuten has a few more pennies in the corporate coffers, folding the Sony ebookstore into Kobo and using Sony connections to broaden the Kobo retail base. Or perhaps Sony simply sells of its store and keeps the premium hardware business and goes agnostic with an Android only eink and Android only tablet ereader that would run multiple ereader apps in the same way Dell computers run multiple web browsers.
That development would neither help or harm B&N, which brings us full circle to the original OP: is B&N better off or worse off splitting Nook from the store operation? And can it afford to keep them whole, in any case?
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I do think Sony needs to get serious about ebook content and get back in the walled garden business; that is where the money is. If they're not, they *should* get out. But, I don't think they're likely to get out of the ereader business until things get much worse; look at how long they've stayed with Walkman, constantly trying to make it relevant. I suppose it would be seen as a loss of face if Sony dropped out of ebook readers.
Now, B&N...
At this point the questions and red flags outnumber the positives, no?
We know for a fact that they put the company for sale as a unit and nobody bit, even though their biggest B&M competitor had just imploded and left a 17% hole in the market. Essentially nobody had the appetite to take it on as a package. And that was *before* the 4th quarter numbers bubbled up with more questions than before.
In pieces? Well...
- Sterling is reportedly a money loser, but it *is* a content acquistion channel.
- Nook, judging by the Kobo sale price should be worth a cool billion to *somebody* unless they're sitting on an inventory time bomb.
- The College Bookstores are solid beachheads in the academic market that should appeal to anybody looking to the future digital textbook business. But they're running in the red, right?
- The B&M storefronts, I really don't know what their intrinsic value might be. If their leases are anything like Borders' 20 year side deals, though, I doubt anybody would touch it with a tractor beam. B&N minus the college stores and Nook looks a whole lot like... Borders...
I'm not sure any management team *could* make those storefronts, as they are now, a viable concern for the long term. A Nook sale, total or partial, might simply generate good money to throw after the bad...
Might the proper answer be to simply spin Nook off, give current Stockholders the Nook stock, and liquidate the rest of B&N altogether?