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BruceMcF
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Re: microsoft buying nook


tendoboy1984 wrote:
Either way, B&N is going to quit their tablet business eventually. Adding Google Play to the Nook HD seems like a wasted effort.

(1) Sell Nook HD

(2) Tablet with B&N ebook store in priviliged place in system is now in somebody's hands

 

The hardware tablet business was never an end in itself, it was a means to an end. If adding Google Play puts the gear in people's hands, it makes all the sense in the world.

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BruceMcF
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Re: microsoft buying nook


roustabout wrote:

Honestly, if the ebook business is not included, I have no idea what Microsoft is paying 1B for.  

 

Wtihout ebooks, wouldn't it just be

 

- Nook hardware (net money loser and the bleeding will likely get worse whoever runs it, even if it 

is the maker of the world-famous Zune music player

 

- college bookstores 

 

What else?  Seriously, without ebooks, what's the billion paying for?  


That seems to contradict what was said when the joint venture was launched:


NOOK Media LLC comprises the digital and College businesses of Barnes & Noble and will continue to have a very close and mutually beneficial relationship with Barnes & Noble's retail stores. The partnership includes a $300 million investment from Microsoft in NOOK Media LLC.


B&N would be the retail and college bookstores (since the deal involves spinning the college bookstores and digital apart with Microsoft paying up to end up owning the digital side).
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tendoboy1984
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Re: microsoft buying nook

[ Edited ]

"Nook hardware (net money loser and the bleeding will likely get worse whoever runs it, even if it is the maker of the world-famous Zune music player"

 

Zune? Nobody cares about that anymore. Xbox is pretty popular though.

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roustabout
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Re: microsoft buying nook

"Zune? Nobody cares about that anymore."

 

My point exactly. 

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BruceMcF
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Re: microsoft buying nook


roustabout wrote:

"Zune? Nobody cares about that anymore."

 

My point exactly. 


The XBox, though, is more to the point. The XBox Live service gives Microsoft the inside position in one of the few successful download to own video media markets, but there are scale economies in licensing and economies of scope in supporting a range of device platforms. Hence the interest in the B&N digital business, and its associated Android app base ~ buying into Nook books and having a Nook app make for Microsoft 8 automatically gives economies of scope between Microsoft 8 and Android devices, so someone can buy media for their PC, Latop or Surface tablet and play it on their Android smartphone.

 

The lack of success of the Nook HD product launch looks to have trimmed $250m~$500m off of the valuation of that business, if Microsoft is bidding $1b for a business that they valued at $1.25-$1.5b when they acquired their joint stake. But the Mother's Day pricing of the Nook HD and Nook HD+ is something that Microsoft would be quite familiar with from their original introduction of the XBox 360.

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5ivedom
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Re: microsoft buying nook

It'd be cool to have Nook HD as a sort-of companion to the Xbox.

 

Xbox and Kinect have a very strong footprint. A Tablet that works with Xbox in multiple ways and is cheap and well made and also doubles up as a general Tablet. That might sell very well.

flyingtoastr
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Re: microsoft buying nook


BruceMcF wrote:

The lack of success of the Nook HD product launch looks to have trimmed $250m~$500m off of the valuation of that business, if Microsoft is bidding $1b for a business that they valued at $1.25-$1.5b when they acquired their joint stake. But the Mother's Day pricing of the Nook HD and Nook HD+ is something that Microsoft would be quite familiar with from their original introduction of the XBox 360.


Remember that Microsoft is bidding for 78% of NOOK Media, not 100%. They already own 17%, and Pearson has 5%.

 

The valuation is down, but not by a huge amount.

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keriflur
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Re: microsoft buying nook

I'm assuming that MS *could* have made an offer to buy Pearson's share, but as that hasn't been leaked, we don't know.

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lotsahelp
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Re: microsoft buying nook

The bricks and mortar B&N locations are struggling, if you look at them their inventory of books is reduced, more and more space is given to "toys". The e-reader is the way for them to survive. But it comes down to are we consumers interested in a one trick pony or do we want an all-in-one tablet? Remember what happened to cameras and gps sales.

It seems that most people who get ipads and such do it for other than reading purposes.  The real issue comes down to those who are buying ereaders to primarily read and then do other things secondary. Unfortunately kindle fire gets most of the press in the tech world(print, tv and radio) because tech people love bells and whistles. 

I don't have the answer. I just have concerns that I not waste my money on something that will not be supported in the future. I got optomistic last year when B&N started a big marketing campaign for the nook , but I guess that didn't work? 

I don't go on the kindle boards so I don't know what issues people are having with that product, I am sure it isn't perfect. I really do not want to see B&N sink like borders did. 

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tendoboy1984
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Re: microsoft buying nook

[ Edited ]
Now some site called Insider Monkey claims the rumor was 100% false. They talked to an alleged Microsoft employee, who said this: "I literally just walked out of the meeting today discussing all this Microsoft/NOOK hoopla going on," the source wrote to us late Friday. "This deal was nothing more than a rumor. Microsoft Corporation (NASDAQ:MSFT) will not come out and deny or confirm for legal reasons, but the company has no intention of acquiring the NOOK unit. NOOK is closely integrated with Android (hence their recent Google Play feature) and there is no way it could be ported to Windows 8. This was simply something TechCrunch rushed to report with no fact-checking." The employee also adds, "The acquisition is not happening in the foreseeable future as Microsoft Corporation (NASDAQ:MSFT) is assessing its options at this time."
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keriflur
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Re: microsoft buying nook


tendoboy1984 wrote:
Now some site called Insider Monkey claims the rumor was 100% false. They talked to an alleged Microsoft employee, who said this: "I literally just walked out of the meeting today discussing all this Microsoft/NOOK hoopla going on," the source wrote to us late Friday. "This deal was nothing more than a rumor. Microsoft Corporation (NASDAQ:MSFT) will not come out and deny or confirm for legal reasons, but the company has no intention of acquiring the NOOK unit. NOOK is closely integrated with Android (hence their recent Google Play feature) and there is no way it could be ported to Windows 8. This was simply something TechCrunch rushed to report with no fact-checking." The employee also adds, "The acquisition is not happening in the foreseeable future as Microsoft Corporation (NASDAQ:MSFT) is assessing its options at this time."

So, are you going to get all worked up in the other direction now, about the new rumor that the first rumor is false?

Doug_Pardee
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B&N profit and loss centers


lotsahelp wrote:

 

The bricks and mortar B&N locations are struggling


Not at all. The bookstores are B&N's most profitable division.

 

For the first 3 fiscal quarters of 2013, B&N reported sales of over $3.6 billion (US) and an operating profit of just under $200 million (US) for their Retail division, which is basically the big bookstores and the BN.com web site. BN.com has always been a big money-loser, so the bookstores probably did a lot better than those figures indicate.

 

For those same 3 fiscal quarters, B&N reported sales of over $1.5 billion (US) and an operating profit of over $72 million (US) for their College Bookstores.


The e-reader is the way for them to survive.

For those same 3 fiscal quarters, B&N reported sales of $668 million (US) and an operating loss of almost $320 million (US) for their NOOK operation.

 

 

So: the bookstores, college bookstores, and BN.com produced profits of about $272 million, and the NOOK division wiped that all out with losses of about $320 million.

 

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keriflur
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Re: B&N profit and loss centers

Confused here - is B&N.com bringing in a profit or a loss?

 

Also, aren't the bookstore profits on a downward trend with fairly fixed costs (leases, etc.)?  My understanding is that this is why they are closing stores when leases expire, cutting bookseller shifts, and "diversifying" the product line.

Doug_Pardee
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Re: B&N profit and loss centers


keriflur wrote:

 

Confused here - is B&N.com bringing in a profit or a loss?


B&N no longer reports BN.com figures separately, but in the decade or so that they did, BN.com never turned a profit and its losses were getting bigger just about every quarter — even with the guaranteed 30% commission on e-books. I have no reason to believe that BN.com suddenly found a path to profitability.

 

  • First 3 quarters of fiscal 2010: $99 million (US) loss at BN.com
  • First 3 quarters of fiscal 2011: $147 million (US) loss at BN.com
  • First 3 quarters of fiscal 2012: $211 million (US) loss at BN.com

keriflur wrote:

 

Also, aren't the bookstore profits on a downward trend with fairly fixed costs (leases, etc.)?  My understanding is that this is why they are closing stores when leases expire, cutting bookseller shifts, and "diversifying" the product line.


Bookstores are in a secular decline. B&N's management is aware of this, and is strategically closing money-losing bookstores in order to keep their expenses down. And yes, adding some general merchandise. The Retail division (big bookstores plus BN.com) recorded about $129 million (US) in profit in the first three quarters of fiscal 2012, and that profit was increased by over 50% to $200 million for the same period in fiscal 2013.

 

B&N doesn't have the long-term leases on their bookstore properties, nor the enormous debt load, that dragged Borders into its grave. Yes, B&N will have fewer bookstores in the future. But the management seems to have its head on straight — something I rarely say about B&N — as far as keeping the bookstores profitable.

 

The Retail division is B&N's cash cow, which is why Len Riggio would like to buy it.

 

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Omnigeek
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Re: microsoft buying nook


luvbooksCM wrote:to their credit, B&N was the first to release the Nook color as an ereader tablet (closely followed by Amazon's Fire),

The Fire didn't follow that closely -- Amazon had to subcontract it to another company and push hard to get it to market after first poohpoohing the Color.  The Fire barely preceded the Nook Tablet announcements.

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BruceMcF
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Re: microsoft buying nook


Omnigeek wrote:

luvbooksCM wrote:to their credit, B&N was the first to release the Nook color as an ereader tablet (closely followed by Amazon's Fire),

The Fire didn't follow that closely -- Amazon had to subcontract it to another company and push hard to get it to market after first poohpoohing the Color.  The Fire barely preceded the Nook Tablet announcements.


Yes ~ Nook Color announced 26 October 2010, Kindle Fire announced 28 September 2011, Nook Tablet announced 7 November 2011. Even if you don't count the Nook Color as an "ereader tablet" until it had its first rudimentary app store, that was 25 April 2011. So more accurate to say the Nook Color introduced for Xmas 2010, and upgraded in Spring 2011, with the Kindle Fire introduced for Xmas 2011, and the Nook Tablet closely following.

flyingtoastr
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Re: B&N profit and loss centers


Doug_Pardee wrote:

keriflur wrote:

 

Confused here - is B&N.com bringing in a profit or a loss?


B&N no longer reports BN.com figures separately, but in the decade or so that they did, BN.com never turned a profit and its losses were getting bigger just about every quarter — even with the guaranteed 30% commission on e-books. I have no reason to believe that BN.com suddenly found a path to profitability.

 


It's worth remembering that before the split of NOOK Media's reporting all of the digital division's losses were reported as BN.com's.

 

Not saying that the site is profitable or not, but I'd actually guess it's better than it was since it doesn't have to deal with those losses on the balance sheet. Then again, they're also not getting the e-content sales from NOOKs either, so it could be pretty bad.



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5ivedom
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Re: B&N profit and loss centers

First leak: B&N negotiating and checking if it can start a bidding war.

 

Second leak: Microsoft trying to downplay its interest so a bidding war doesn't start.

 

*******

 

Everything MacMcK said.

 

The Stores are profitable because unprofitable ones are slowly being closed down.

 

The Nook division causes a lot of losses due to investment in devices (customer acquisition).

 

If at some point of time B&N stops making devices (or sticks to eInk) then it'll be left with a TON of users on Nooks and very little R&D costs. At that point it'll have a profitable ebooks division. However, there'll be little growth and just gradual loss of readers.

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keriflur
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Re: B&N profit and loss centers


flyingtoastr wrote:
Then again, they're also not getting the e-content sales from NOOKs either, so it could be pretty bad.

By e-content, isn't that ebooks?  Are you saying that if I buy a book from my nook, the sale affects Nook Media's bottom line, but if I buy an ebook on the website, the sale goes to B&N?

 

Wouldn't the ebook business be wholly one or the other?

flyingtoastr
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Re: B&N profit and loss centers


keriflur wrote:

flyingtoastr wrote:
Then again, they're also not getting the e-content sales from NOOKs either, so it could be pretty bad.

By e-content, isn't that ebooks?  Are you saying that if I buy a book from my nook, the sale affects Nook Media's bottom line, but if I buy an ebook on the website, the sale goes to B&N?

 

Wouldn't the ebook business be wholly one or the other?


Right now it's just a financial reporting thing, as all the money is going to Barnes & Noble Inc., LLC regardless of how it's reported.

 

As I understand it, though, any econtent sales go to NOOK Media for reporting. Sorry if it wasn't clear.