Does Barnes and Noble have a (viable) Digital Strategy?

[fjtorres]

After the recent announcement, lots of people are wondering.
http://www.futurebook.net/content/do...gital-strategy

Some interesting questions about the intent to sell Sterling (a content *generator*) at a time competitors are gearing up to acquire more exclusive content and about brand awareness and even the whole idea of "exploring" the separation of Nook while at the same time saying it might *not* lead to an actual separation. Which brings back thoughts of last year's "sale" of B&N that ended with nobody willing to buy it and a bridge loan instead.

It may be that B&N is in too deep for strategic planning and are in more of a *tactical* mode and tto busy putting out fires as they errupt without much thought of the bigger picture.

Or maybe, as the article suggests, there simply is no bigger picture-thinking at B&N.

I assume there will be lots of articles like this floating around unto B&N gets around to explaining. Or selling. Or filing Chapter 11.

At least there's something new to chew on for a while.

[MV64]

I'm betting on the "no big-picture thinking" and BN. It's not exactly their strong point.

[stonetools]

I wish B&N the best of luck. We need continuing competition in the ebook retail market.

[fjtorres]

We need *competent* competitors.
Roadkill, there'll be no shortage of...

[anamardoll]

Re: B&N Big Picture Thinking, I ranted about that in March and wouldn't you know it that everything I complained about is either the same or worse. *sigh*

A big frustration I have is that they basically DESPISE customer service. I sent them an email awhile back -- not terribly easy to find their cs page -- about a book having the wrong cover on their site. The paperback was right, but the ebook version was wrong.

Two weeks later I got a response saying that I'd sent my note to the wrong email.

And telling me the right email to send it to.

Without quoting back the actual research I'd done with the correct links.

Or forwarding my concern to the email.

SO, yeah. Back at ya, B&N.

And as an affiliate, it's even WORSE. Amazon has a "link to this page" interface on EVERY page of their website. B&N not only doesn't have that, their links don't even work 50% of the time because the links are usually "search result" links that can change and not direct links to a product. So when I review a Nook Book on my blog, where do I link to as an affiliate for my readers? If you guessed Amazon, you win the doll. *sigh*

[Vic333]

B&N doesn't seem to have a serious digital strategy, starting with their clumsy search engine on their web page, and continuing on down to their e-book selection. I envisioned that they would have a noticeable lag compared to Amazon, but now it's starting to seem like they don't even care.

[wizwor]

B&N is positioning itself for sale to Google, Apple, or Microsoft. As Amazon beefs up it's Prime service, the others will need to offer similar eco-benefits to their customers.

I think Microsoft will buy B&N plus Netflix and go to war with Jeff Bezos.

[bwaldron]

Originally Posted by wizwor

I think Microsoft will buy B&N plus Netflix and go to war with Jeff Bezos.

A war they would lose. MS simply isn't set up to compete in a heavily service-oriented market (although they're better than Google in that respect).

[wizwor]

I don't think either side would lose. Microsoft will do (always has done) fine. Remember the Microsoft Windows vs Apple personal computer War drove Apple to the verge of bankruptcy. Microsoft Internet Explorer was a late comer to the browser wars but sits on top of the pile. The Xbox is now the leading (sales) console.

Zune was their first excursion into personal entertainment. The excellent metro interface will be integrated into Windows 8 and is already part of Windows Phone and the Xbox. The Zune Store was inexpensive, but lacking in content.

Netflix staggered last summer and B&N is faltering. Launching Windows 8 with a book store, a huge movie and television library would position Microsoft to compete with Amazon.

The Financial Post blogged this...
What’s that you say? Xbox Kinect is the fastest selling consumer gadget of all time? Microsoft is now No. 2 in Web search? Windows Phone now has 50,000 applications, an impressive flagship smartphone from Nokia Oyj and even the New York Times thinks it’s cool? Huh.

All of a sudden, armed with the Xbox video game console, a revamped mobile division, a reliable search engine and Windows 8 on the horizon, it’s starting to look like Microsoft is getting its mojo back. The company’s “Metro” tile interface — which will stretch across Windows Phone, Xbox Live and Windows 8 — is fresh and elegant and might just cause a few people to rethink their views about the “evil empire.”

Microsoft has tons of cash and Windows 8 is already showing Windows 8 tablets to educators.

[fjtorres]

Amazon and Microsoft have a reasonably polite relationship.
Where they compete in Business Services they behave like professionals and accord each other due professional courtesy. Since the overlap is minimal, there is no reason whatsoever for Microsoft to go to war Amazon, much less start such a war by wasting money buying the B&N storefronts just to liquidate them.

Microsoft only buys companies that do something they don't and do it well, or own a particularly valuable asset; B&N is neither. More, from a tech company point of view, there is zero net value in B&N; the plus of the Nook marketshare is negated by the minus of the storefront leases.

Even Nook alone isn't all that valuable to Microsoft since it is built on Adobe and Google tech. If MS had any inclination to get serious about consumer ebooks (which they clearly don't) they wouldn't be killing MSReader/LIT or they would be buying into Blio, which is built using MS tech.

As for Google buying B&N or just Nook: MS would *love* that.
Remember, among the other problems facing B&N, they are looking at a patent infringement suit from MS over Nook and they "oh-so-prudently" went publicly ballistic, petulantly ranting about MS's "unfairness" and effectively daring MS to do their worst. So anybody buying Nook inherits the ongoing lawsuit and the poisoned negotiation well.

Google, with its hands-off approach to Android patent lawsuits would have to think twice about buying the lawsuit, as MS has been careful not to sue them, yet. If they did, it would be the opening MS could use to amend the lawsuit to include all of android. And, unlike B&N, who only face monetary damages in a MS win, Google would be facing a cease-and-desist order that could force them to re-write Android, as well as the deep pockets to actually pay full freight on *all* the patents MS can assert.
Whether MS could actually win such a trial is unclear, but the legal costs, the further FUD on Android, and the stakes at risk means Google is not going to touch Nook until B&N settles the lawsuit. Remember, Google already faces a billion-dollar liability looming over Android from Oracle's case. They don't need MS piling in. It might tempt Apple...

Indeed, odds are, any potential Nook buyer will insist B&N settle the suit first, just to see how it affects Nook profitability.

Realistically, the most viable buyer for B&N (IP-wise) today would be Apple (they have wide patent crosslicesing with MS and no use for Android) but they have need for neither the storefronts or Nook. The college bookstore and textbook business they might have an interest in, though.

Other candidates? Sony would be a nice fit for the ebookstore, as it would get them out of the generic Adept ebook business and back in the walled garden business they started with, but they are bleeding money from a million wounds already; they can't afford the upfront costs. If B&N ever got to liquidation (unlikely as it is) they might be a good buyer for the ebookstore piece.

Hmm, basically, It looks like B&N as currently constituted can't be sold, but in pieces...?
Gulp! Maybe liquidation isn't unthinkable.

[fjtorres]

Originally Posted by wizwor

I don't think either side would lose. Microsoft will do (always has done) fine. Remember the Microsoft Windows vs Apple personal computer War drove Apple to the verge of bankruptcy. Microsoft Internet Explorer was a late comer to the browser wars but sits on top of the pile. The Xbox is now the leading (sales) console.

Zune was their first excursion into personal entertainment. The excellent metro interface will be integrated into Windows 8 and is already part of Windows Phone and the Xbox. The Zune Store was inexpensive, but lacking in content.

Netflix staggered last summer and B&N is faltering. Launching Windows 8 with a book store, a huge movie and television library would position Microsoft to compete with Amazon.



Microsoft has tons of cash and Windows 8 is already showing Windows 8 tablets to educators.

All that is true, but MS is better served, on the tablet front, by keeping it open to all ebook vendors. In the event they want a bunfled ebookstore, they could just partner with Blio (highly likely, actually) or even Amazon (as long as they don't demand an Apple-like 30% cut a deal is doable) or both.

Just keep in mind that MS sees Win8 Tablets as a firewall against iOS penetration in the business market and only secondarily as a consumer play ala XBOX.

[SensualPoet]

The thing B&N could do would be to prove they can run the bricks and mortar business in an attractive, long-term profitable manner so they can sell off the Nook digital business at a premium and reward the long-suffering B&N shareholders.

Would Sony be interested?

[wizwor]

Originally Posted by fjtorres

Just keep in mind that MS sees Win8 Tablets as a firewall against iOS penetration in the business market and only secondarily as a consumer play ala XBOX.

I don't agree with this. MS was the first to try to sell a tablet. This is a return for them. I think they see iOS as a firewall against antitrust and another platform for their products (they sell a windows license for nearly every apple computer). I think they see services as a cash cow.

Have you seen Fiona?

I am brand agnostic. My home has a WII, a PS3, and an Xbox. We got the PS3 because it was the best, most versatile home entertainment console. We got the WII because we thought we wanted to play all those jump around games. We have an Xbox because MS has out-consoled Nintendo and Sony. Kinect, Live, Xbox exclusives, the Xbox Live Arcade, and relentless price cuts have elevated Microsoft to the top of an industry they were not in eleven years ago (11/15/2001).

I think they have the money and vision to lead in any industry where they choose to compete. I'd be shocked if they did not think entertainment was the place to be. Time will tell.

[anamardoll]

Originally Posted by wizwor

I am brand agnostic. My home has a WII, a PS3, and an Xbox.

Technically, I think that's Brand Pantheism, not agnosticism.

[fjtorres]

Originally Posted by wizwor

I don't agree with this. MS was the first to try to sell a tablet. This is a return for them.

A return? They never left.
They still sell Windows TabletPCs by the million.
(I own several, myself, going back to the first-gen Compaq TC1000.)

MS can compete in any market they choose, yes; but they *can't* compete in *every* market. Nobody can.

The trick is leverage their strengths to get the best return to their stockholder, not go stumbling into every market in sight or picking needless fights with other industry leaders.

Win8 tablets should be a nice extension of their existing X86 TabletPC business and supercede their existing WinCE on ARM tablet platform, just as WP7 superceded WinMo 6.x Phones.

MS is going to do fine and I'm looking forward to a Win8 ultrabook-class tablet. But they down have to go to war with Amazon to do so. They just don't overlap enough for it to be worth it. Remember, Win8 Tabs will start no lower than $399 and odds of a Kindle FIRE higher than $299 are near zero.

There's room for coexistence there.
MS didn't even have much of a beef with B&N until their hissy-fit.
Now, though, all bets are off.