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Barnes & Noble Buys Microsoft Out of Its Nook Stake

Barnes and Noble, booksellers since 1873 - peoplewhowriteBarnes and Noble has ended its partnership with Microsoft in its ongoing fight to stay solvent amidst shifting consumer behavior, competition from Amazon, and negative revenue from their struggling Nook division. In 2012, Microsoft invested $300 million into B&N’s then-new e-reader business, but, the New York Times reports, “In just over two years, the Nook business has lost more than half its value.”

The bookstore chain’s new CEO Michael P. Huseby reportedly told investors the split clears the path for B&N to separate from Nook, as has been the plan since the digital reading device failed to dent Kindle and iPad’s domination of the e-reader market.

An analyst at the Maxim Group, John Tinker, suggested Barnes and Noble’s multi-hyphenate marketplace identity is a liability to investors. “…are you a retailer, are you a technology company, or are you a college bookstore company?” Tinker is quoted as asking in the aforementioned New York Times piece. “…clearing up things with Microsoft begins to simplify things.”

The 141 year old bookseller has had a challenging two years. At the top of 2012, they refused to carry books published by Amazon in response to “Amazon’s continued push for exclusivity with publishers, agents and the authors they represent,” TIME reported.  In December 2012, they announced store closings, then more in January 2013. Also in January ’13, Publishers Weekly reported B&N had reduced orders of Simon and Schuster titles in alleged retaliation for “not adequately supporting them”, presumably, in their standoff with Amazon.

The following month, investor Daniel R. Tisch bought enough shares to make him the bookstore’s second biggest shareholder — this show of confidence boosting B&N’s stock price. But the good news was short-lived as the company’s then CEO resigned in July 2013. Through it all, sales and foot traffic have been sliding.

The chain hopes to reverse the holiday sales and foot traffic trend specifically by offering customers signed copies by popular authors. Some buyers will likely sell the signed books online (maybe even on Amazon), but it seems to be the beginning of the retailer looking at how they can offer and create value with their brick and mortar presence by offering unique products and experiences that aren’t easily replicated online.

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One response to “Barnes & Noble Buys Microsoft Out of Its Nook Stake

  1. Pingback: Amazon Opens Brick and Mortar Location, Might Buy RadioShack Stores | people who write

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