MediaFile

Barnes & Noble, the venerable book merchant whose history spans three centuries, is in the midst of a strategic identity crisis: how to admit defeat on its Nook platform while turning its last-bookstore-standing status into a de facto monopoly. Barnes & Noble did not spark the e-book revolution – now accounting for 22 percent of all book sales – nor has it proven particularly good at evolving it. So now it’s back to basics, which is to say, back to books.

The precise fiscal health of the company’s Nook Division ‑ e-readers and e-books ‑ is not public knowledge. But the company’s most recent results revealed that its total losses had increased from the previous year. This, as you might surmise, is not the desired trajectory for a business unit that Microsoft asserted was worth $1.7 billion a mere 10 months ago (when Microsoft invested $300 million for a 17.6 percent stake). Only three months ago, Pearson reaffirmed that estimate when it took a 5 percent stake for $89.5 million.

Now the New York Times reports that a person familiar with the company’s strategy says disappointing holiday sales in particular “caused executives to realize the company must move away from its program to engineer and build its own devices and focus more on licensing its content to other device makers.”

In other words, not quite four years after it released its first Nook e-reader, B&N is prepared to close the books on hardware.

To wit: The company’s chairman, Leonard S. Riggio, is bidding to buy all 689 Barnes & Noble bookstores, effectively separating the fate of old media from that of the e-book division, which was predicated on the ill-fated strategy of pushing e-reading devices as well as reading material.

Inkling, the three-year-old start-up that transforms bulky textbooks into an interactive experience for the iPad and other tablet devices, launched on Tuesday an ambitious new publishing and search platform aimed for non-fiction content such as books on wine and cooking or ones that covers topics like pregnancy.

Inkling is taking on the big cheeses of distribution by making  content produced on the Inkling platform easier to search through Google. So the titles or chapters or just a page of a relevant book will pop up when someone is seeking a specific topic.

“The problem is people don’t start to search on Amazon,” said Matt MacInnis, founder and CEO of Inkling.  “They start on Google and end up on Amazon.”

The Department of Justice, as anticipated, filed suit Wednesday against Apple and five of the Big Six publishers over alleged price-fixing. Three of those publishers have entered into a proposed settlement with the DOJ, but Apple is still on the hook.

We won’t know until we know whether Apple will win, lose or settle (and now there are 16 states piling on the charges, too), but in a way it’s a sort of hapless victim. If the DOJ theory is correct, Apple did participate in a sort of conspiracy, but one driven (again, according to the allegations) by publishers that were determined to keep controlling e-book prices. In the beginning of the e-book industry it was the publishers, not Apple, that had the upper hand.

It’s important to remember the climate in which this alleged conspiracy unfolded. Amazon, against publishers’ wishes, was going rogue with $10 e-books. The mammoth online retailer – which got its start in print books but essentially created the e-book business – was widely thought to be making nothing, or next to zero, on its proprietarily encoded e-books, the better to boost demand for the Kindle.

By Tyler Cowen

The views expressed are his own.

“Can you sign my Kindle?” I guess authors on publicity tours are assuming this line is a joke, but it soon won’t be. Clever entrepreneurs are developing ways that authors can electronically sign a fan’s Kindle, Nook, iPad, or any such device, sometimes together with a photograph of the author and reader, ready for posting on Facebook and Twitter. One version of this new idea is called Autography.

That’s a neat trick, but it’s not yet for everyone. One of the core messages of my latest book The Great Stagnation is that innovations take a long time to work their way through society. They can take decades to spread and to transform our daily practices, and in the meantime a lot of the gains of those innovations go unexploited. Many of the potential gains from “eReading” are still sitting on the proverbial shelf, just as it took electricity many decades to transform the U.S. economy. As both producers and consumers, we haven’t been nearly as radically innovative as we often like to think.

The original publication of The Great Stagnation was in eBook form only, and I meant for that to reflect an argument of the book itself: The contemporary world has plenty of innovations, but most of them do not benefit the average household. After all, the average household does not own an eReader. It’s not even clear whether the average household buys and reads books. So I viewed the exclusive electronic publication, somewhat impishly, as an act of self-reference to the underlying problem itself. It was therefore a bit amusing when some critics suggested that the new medium of the eBook itself refuted the book’s stagnation theory—quite the contrary.

Successful childrens’ books publisher Nicholas Callaway believes paper is dead and that digital has come of age, writes Mark Egan. But Callaway isn’t worried that big publishing houses will eat his lunch. “They don’t understand the new medium, they don’t have the rights, they don’t know how to create the product and they don’t know how to get it out to the world,” Callaway told Egan. January e-book sales more than doubled from the same month a year earlier, rising 116 percent to $69.9 million, according to the Association of American Publishers. That topped sales of hardcover books, which fell 11 percent from January 2010 to $49.1 million.

Google will probably have to make some changes to how it does business as a result of antitrust scrutiny, in return for the ability to protect what it regards as its necessary freedom to innovate, writes Steve Lohr of The New York Times.

With all of the buzz around Google and privacy, is it any surprise that the company’s efforts to develop a mobile app that will identify people’s faces in order to access their personal information have stalled?  Experts say the novelty of a face recognition app may help attract early adopters. But policies would need to be uncomplicated and straightforward to keep users from abandoning it over privacy concerns, writes CNN’s Mark Milian.

Something about returning from the Christmas holidays makes people want to show off what they received – a new sweater donned, a new gadget subtly pulled out at meetings, a few extra pounds padding the belly.

Jeff Bezos doesn’t like this tradition. He will hint at the generous present that consumers gave to Amazon in the form of surprisingly strong sales, but he won’t offer details.

Bezos wants you to know that his Kindle – the e-book reader that has done a remarkably good job surviving in the age of the iPad – was Amazon’s “bestselling product of all time.” How many Kindles did Amazon sell? We don’t know because Amazon isn’t saying.

On the heels of major booksellers Barnes & Noble and Amazon.com announcing milestones related to their e-readers, The Pew Internet and American Life Project has released a survey called “65% of Internet users have paid for online content“.

Reading past the single conclusion of the title, it’s easy to appreciate how varied that content is.

For example, the survey says that 33 percent of U.S. Internet users have paid for digital music online. It’s the same for software.

Pity paper and ink. Over the next five years magazine and newspapers’ advertising and consumer spending (read: subscriptions)  growth rate is expected to decline, according to PricewaterhouseCoopers. The firm released its annual Media and Entertainment Outlook for 2010-2014 and that is one of the more striking, if not predictable, data points in the forecast.

In fact, magazines and newspapers fork in the opposite direction of other traditional media like radio.  PWC predicts that television,and radio, along with the Internet, video games and out-of-home are all expected to pocket advertising and subscriber dollars  with  growth rates increasing over the 2010-2014 period.

Another category  that has taken a beating but is expected to rebound? Books! PwC estimates the consumer and educational book publishing industry will advance 2.5% in the five year period to $35 billion.