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.