43 Replies Latest reply on Jan 6, 2012 1:35 PM by moose_tracker

    Barnes & Noble To Explore Separation Of NOOK Digital Unit

    gb18

      Barnes & Noble To Explore Separation Of NOOK Digital Unit; Revises FY12 View 

       

      (RTTNews.com) - Barnes & Noble Inc. Thursday announced its decision to pursue strategic exploratory work to separate the NOOK digital business, while reporting a 70% growth in NOOK unit sales, including NOOK Simple Touch, NOOK Color and the new NOOK Tablet, for the nine-week holiday period ending December 31, 2011.

      The company noted that NOOK Tablet's sales exceeded expectations, while sales of NOOK Simple Touch lagged expectations, indicating a stronger customer preference for color devices. Digital content sales also grew briskly during the same nine-week period, increasing 113% on a comparable basis.

      For the nine-week holiday period, Barnes & Noble store sales increased 2.5% over the prior-year period to $1.2 billion. Comparable-store sales were up 3.4%, on top of a 9.7% rise last year. Retail core comparable store sales, defined as the sales of non-digital merchandise, increased 4.5% over the prior year.

      For fiscal 2012, the company currently expects consolidated sales between $7.0 billion and $7.2 billion. Comparable sales at Barnes & Noble stores are expected to increase 1%, Barnes & Noble College sales are expected to be flat, and sales are expected to increase 40% to 50% at BN.com. Further, Barnes & Noble now anticipates full year losses per share to be in a range of $1.40 to $1.10.

      For comments and feedback: contact editorial@rttnews.com

      http://www.rttnews.com



        • Re: Barnes & Noble To Explore Separation Of NOOK Digital Unit

          Good chance that the DTB and brick n mortar part of the business is still headed for some form of Bankruptsy. Splitting off the Nook portion would protect that aspect of the business.

           

          Just an opinion/guess

           

          ** Dup post**

            • Re: Barnes & Noble To Explore Separation Of NOOK Digital Unit
              flyingtoastr

              phoneboy wrote:

              Good chance that the DTB and brick n mortar part of the business is still headed for some form of Bankruptsy. Splitting off the Nook portion would protect that aspect of the business.

               

              Just an opinion/guess

               

              ** Dup post**


              Nah.

               

              As I see it, this is just a plan to get some more money to fund NOOK development without impacting the B&M stores.

               

              The stores themselves are still profitable. Not hugely so, but more than enough to cover their expenses. The large losses BN is taking stems almost entirely from NOOK development and advertising costs. Spinning off NOOK into a seperate company (or at the very least as a seperate line item on their P/L reports) allows the company to illustrate that the retail stores are still viable and remove a large drain on their resources.

               

              Plus, there's the added benefit that spinning NOOK into a seperate company means another IPO on a very strong brand, which could fund that development without the financial burden falling on store sales. Generating another (say) billion dollars in a NOOK IPO would go a long way towards helping the entire company remain solvent.

               

              There are strong risks involved, though, especially in the hostile takeover territory.

              • Re: Barnes & Noble To Explore Separation Of NOOK Digital Unit

                I have been reading all day the different news stories and am very concerned that I made a big mistake buying the NOOK Tablet.  Aside from the side loading diabolical, now it appears that shortly after its release, they are getting rid of the NOOK.  To me, this means no further software enhancements or bug fixes such as the very poor and buggy email client.  It also means that I will never buy an eBook from B&N because that book does not reside on my NOOK Tablet but on their infrastructure.  Why buy an eBook or app if they sell off the NOOK and there is no more access to the eBooks and apps I bought.  I then have a $250 brick for a paper weight.  I guess my only option now is to return my new NOOK Tablet before it is too late.

                  • Re: Barnes & Noble To Explore Separation Of NOOK Digital Unit
                    moose_tracker

                    No one said they were selling off the Nook, just splitting it from the Stores, and it is not a definate, they are thinking about it.. From there it is all speculation of why they are doing it, and what will happen to the stores, and if they can make a go of the Nooks on thier own..

                     

                    They are looking to sell a publishing company that they also own, but to date that is all they are looking at selling off.

                     

                    So if you were not thinking of returning your nook due to being upset on the issue of the sideloading, and are happy with your device, all but for the worrisome reports today, just wait a few days to see what will happen.. Hopefully the news report tomorrow will shed light on B&N future plans.

                      • Re: Barnes & Noble To Explore Separation Of NOOK Digital Unit
                        Jadjuka

                        moose_tracker wrote:

                        No one said they were selling off the Nook, just splitting it from the Stores, and it is not a definate, they are thinking about it.. From there it is all speculation of why they are doing it, and what will happen to the stores, and if they can make a go of the Nooks on thier own..

                         

                        They are looking to sell a publishing company that they also own, but to date that is all they are looking at selling off.

                         

                        So if you were not thinking of returning your nook due to being upset on the issue of the sideloading, and are happy with your device, all but for the worrisome reports today, just wait a few days to see what will happen.. Hopefully the news report tomorrow will shed light on B&N future plans.


                        On some of the news sites it does state that they are considering selling the nook. 

                      • Re: Barnes & Noble To Explore Separation Of NOOK Digital Unit
                        Omnigeek

                        LDW1 wrote:

                        I have been reading all day the different news stories and am very concerned that I made a big mistake buying the NOOK Tablet.  Aside from the side loading diabolical, now it appears that shortly after its release, they are getting rid of the NOOK.  To me, this means no further software enhancements or bug fixes such as the very poor and buggy email client.  It also means that I will never buy an eBook from B&N because that book does not reside on my NOOK Tablet but on their infrastructure.  Why buy an eBook or app if they sell off the NOOK and there is no more access to the eBooks and apps I bought.  I then have a $250 brick for a paper weight.  I guess my only option now is to return my new NOOK Tablet before it is too late.


                        B&N has never said they're getting rid of the Nook, that was one "analyst" spinning the situation and he sounded more ignorant than a sack of potatoes to me.  If B&N does spin the Nook off it will be more like McDonald's spinning off the Chipotle restaurants or IBM selling its computer division to Lenovo than Ford ending the Thunderbird line.  gb18 doesn't post a LOT but when he does it tends to be repetitive and especially dark and gloomy toward B&N.

                         

                        You have until the end of the month to see how things shake out but I very much doubt B&N's explorations could be construed as an end to the Nook or your Nook content.  By the way, one of the strengths of the Nook is that you can purchase content from sources other than B&N and still load it so it would retain its utility even if B&N's Nook division disappeared.

                          • Re: Barnes & Noble To Explore Separation Of NOOK Digital Unit
                            gb18

                             

                             

                             

                             

                             


                            Omnigeek wrote:

                            LDW1 wrote:

                            I have been reading all day the different news stories and am very concerned that I made a big mistake buying the NOOK Tablet.  Aside from the side loading diabolical, now it appears that shortly after its release, they are getting rid of the NOOK.  To me, this means no further software enhancements or bug fixes such as the very poor and buggy email client.  It also means that I will never buy an eBook from B&N because that book does not reside on my NOOK Tablet but on their infrastructure.  Why buy an eBook or app if they sell off the NOOK and there is no more access to the eBooks and apps I bought.  I then have a $250 brick for a paper weight.  I guess my only option now is to return my new NOOK Tablet before it is too late.


                            B&N has never said they're getting rid of the Nook, that was one "analyst" spinning the situation and he sounded more ignorant than a sack of potatoes to me.  If B&N does spin the Nook off it will be more like McDonald's spinning off the Chipotle restaurants or IBM selling its computer division to Lenovo than Ford ending the Thunderbird line.  gb18 doesn't post a LOT but when he does it tends to be repetitive and especially dark and gloomy toward B&N.

                             

                            You have until the end of the month to see how things shake out but I very much doubt B&N's explorations could be construed as an end to the Nook or your Nook content.  By the way, one of the strengths of the Nook is that you can purchase content from sources other than B&N and still load it so it would retain its utility even if B&N's Nook division disappeared.

                            geek, I hope this is a little less dark and gloomy.........

                            http://the-cheap.net/2012/01/06/as-the-nook-spins-away-from-bn-the-shift-and-the-future-for-nook-owners/

                          • Re: Barnes & Noble To Explore Separation Of NOOK Digital Unit
                            Mark_OB1

                            LDW wrote:

                             

                            > I have been reading all day the different news stories and am very concerned that I made a big mistake buying the NOOK Tablet. <

                             

                            I haven't been reading all of them, but enough to know that there is a lot of totally uninformed speculation going around.  It actually surprises me a little bit, knowing just how unprofessional many in the media are.  And just how quickly they can concoct doomsday scenarios that have no connection to reality.

                             

                            > Aside from the side loading diabolical, <

                             

                            Did you perhaps mean "debacle"?  I know many folks were unhappy about losing side-loading, but even they didn't accuse B&N of moustache twiddling.  Aka, Simon bar Sinister.  :smileyvery-happy:

                             

                            > now it appears that shortly after its release, they are getting rid of the NOOK. <

                             

                            And that is perhaps one of the most astonishing leaps of fantasy I've ever heard.  The Nooks are critical to the long-term success and viability of B&N.  They are definitely not getting rid of them, and anyone who says they are is nuts.  It's unfortunate that folks can not understand a fairly simple concept of splitting off a segment of a company, to enable separate management and reporting for the two parts.  See FT's commentary elsewhere for why this could be advantageous for B&N.

                             

                            > It also means that I will never buy an eBook from B&N because that book does not reside on my NOOK Tablet but on their infrastructure. Why buy an eBook or app if they sell off the NOOK and there is no more access to the eBooks and apps I bought. I then have a $250 brick for a paper weight. <

                             

                            Not even close to true.  If you download your ebooks to your PC,  then you'll have a copy permanently, that you can reload to your NT at any time.  The only thing you'd lose in that worst-case scenario would be the ability to download from B&N servers.  Plus, you can sideload a virtually unlimited amount of content on to your NT from others sources, to read as you like.  And much of it is free.

                             

                            > I guess my only option now is to return my new NOOK Tablet before it is too late.

                             

                            If you do, please make sure on your way to stop and let Henny-Penny know that the sky is falling.  :smileywink:

                             

                            - Mark

                             

                              • Re: Barnes & Noble To Explore Separation Of NOOK Digital Unit
                                http://dealbook.nytimes.com/2012/01/05/barnes-noble-considers-spinning-off-its-nook-unit/?partner=yahoofinance Barnes and Noble is *not* getting rid of the NOOK. This is all about financing, and strategies for growth. What we have in the Nook division at Barnes and Noble is really an explosive startup in tech, rocketing in just two years to second place in the e-reader market with a 30 percent share of that market. It is basically new company that is investing heavily in growth, but being funded by a company whose financing will never behave like a growth company. Traditionally, when you have huge growth, you attract more investment based on that projected growth which is why good tech companies with prospects to be earning higher in the future than they are in the present gain value in the marketplace. People buy in to that investment in growth. This is why Amazon as a tech company commands a ridiculous 130 times it's earnings it's stock valuation... It's because investors are willing to pay much more for it's current earnings on the expectation that in the future the company is going to make much more. Because when you invest in the company, you own a share in that expected earnings. When companies are growing, they are investing heavily in future growth so losses initially are to be expected. Amazon, Google, all kinds of companies lost money initially but became hugely profitable when that investment matured. What is happening with Nook is, it is a startup, and it is investing heavily, but it doesn't have the financial tools to feed that investment. It can't raise the kind of capital investment that it *should* be able to as a growth company because it is hindered by the bricks and mortar business which operates fundamentally differently. The move to split the business is actually a necessary and potentially smart move, if Barnes and Noble retains a stake in the Nook. What it does is basically give legs to the digital arm to grow... There are I think a number of other Interesting scenarios that become possible for the Nook by not being ball and chained in the service of Barnes and Noble only that I can imagine related to greater flexibility in its partnerships by splitting off the Nook business as its own entity... For example, it can be jointly owned by different companies... It could see investment by different entities, tech companies, international companies etc. Having more businesses with a stake on the nooks success could only be a very good thing for its growth and development... Will expand on this thought later, when I'm not typing with an index finger on the iPhone...
                          • Re: Barnes & Noble To Explore Separation Of NOOK Digital Unit
                            moose_tracker

                            So can someone explain what they mean by seperate?  Are they doing good selling the Nooks, so they want to sell that devision off?  Or like Netflix tried to do this summer, make the selling of the Devices a seprate entity (which doesn't make sense as it is a one time sale, unless this is a way to get more computer geeks on board with their app store)..

                             

                            And what do people foresee (good & bad) about this move for them?

                             

                            OK, posts crossed I will now need to read what gb18 posted a link for.  So you think they are going to maybe let the BM part of the buisness sink and die with this move, and just live through an on-line store eventually phoneboy??

                            • Re: Barnes & Noble To Explore Separation Of NOOK Digital Unit

                              I wonder how this will effect we the users of the NT. I am sorry to say we don't have a store in our community, one reason I bought the NT, Easy of purchasing a book, hugh online inventory. And the NT was a better design than the fire.

                               

                              Now I am hoping I did not make a mistakes.... If thing turn bab maybe some one get a good "hack" were it will not be collecting dust.

                               

                              Personally I love my NT, and been telling folks to buy it,,,,,,,,,,,,,,,,,,,,,,

                               

                              Oh well........

                               

                                • Re: Barnes & Noble To Explore Separation Of NOOK Digital Unit

                                  The ability of B&N to survive long term against the goliath that is Amazon was my major concern when choosing the NT originally. I was planning to wait until Jan 30 to return my NT but think I will go to the store today.

                                   

                                  I truly hope that this is a minor blip.

                                   

                                   

                                   

                                  • Re: Barnes & Noble To Explore Separation Of NOOK Digital Unit
                                    flyingtoastr

                                    marko59 wrote:

                                    I wonder how this will effect we the users of the NT. I am sorry to say we don't have a store in our community, one reason I bought the NT, Easy of purchasing a book, hugh online inventory. And the NT was a better design than the fire.

                                     

                                    Now I am hoping I did not make a mistakes.... If thing turn bab maybe some one get a good "hack" were it will not be collecting dust.

                                     

                                    Personally I love my NT, and been telling folks to buy it,,,,,,,,,,,,,,,,,,,,,,

                                     

                                    Oh well........

                                     


                                    This is, of course, the biggest danger with being a publicly traded company.

                                     

                                    The 1% of people who own stock in the company panic when it looks like their portfolio might go down within the next couple days, which has near no effect on the 99% of people with an actual vested interest in the company (consumers), yet everyone is led to believe that the actions of that 1% actually means something.

                                     

                                    Incidentally, never trust an "analyst" either. They universally said Enron was a solid AAA Buy two days before the company exploded.

                                  • Re: Barnes & Noble To Explore Separation Of NOOK Digital Unit
                                    DeanGibson

                                    gb18 wrote:
                                    ...

                                    The company noted that NOOK Tablet's sales exceeded expectations, while sales of NOOK Simple Touch lagged expectations, indicating a stronger customer preference for color devices. ...


                                    Or, it could indicate a stronger customer preference for tablet-like functionality.

                                     

                                    If the quoted "customer preference for color devices" is a B&N statement (as opposed to an analyst's statement), then I wonder about B&N ...

                                      • Re: Barnes & Noble To Explore Separation Of NOOK Digital Unit

                                        DeanGibson wrote: "If the quoted 'customer preference for color devices' is a B&N statement (as opposed to an analyst's statement), then I wonder about B&N ..."

                                        ___________

                                         

                                        The language is a direct quotation from today's B&N press release. Wonder away.

                                         

                                        This is my favorite part of the press release:

                                         

                                        "Digital content sales also grew briskly during the same nine-week period, increasing 113% on a comparable basis. Content sales are defined to include digital books, digital newsstand, and the rapidly growing apps business."

                                          • Re: Barnes & Noble To Explore Separation Of NOOK Digital Unit
                                            bobstro

                                            Some un-cheerful news here (emphasis mine):

                                            "[...] Even though the Nook is growing quickly — at 70% during the holiday season — it still might not get a premium valuation. The business continues to be a source of losses because of the huge necessary investments. Consider that Barnes & Noble projects pretax earnings of only $150 million to $180 million for fiscal 2012, and only last month the projections were for $210 million to $250 million.

                                             

                                            And with the continued success of Apple‘s (NASDAQ:AAPL) iPad as well as Amazon’s dirt-cheap Kindle Fire tablet, it could be tough for the Nook to remain a sustainable business, even with itshigher-horsepower Nook tablet.

                                             

                                            So this really might be the end game for Barnes & Noble. The strategy seems to be to monetize the assets, then perhaps go private. From there, the company can starve investments in its stores and try to harvest the cash flows — until the inevitable day comes when the retail business simply goes away."

                                             

                                            If this is true, and I certainly hope it isn't, these moves are less about "protecting the ereader" business, and more about going all Bain Capital and squeezing every last cent out of the company's assets before total collapse. Not a good thing for customers, and even less so for employees of all stripes.

                                             

                                            Sad to say, this underscores the point that a closed market and inability to sideload apps is going to make it hard for would-be buyers to feel good about making a Nook Tablet purchase, unless they're buying it with the specific intent of rooting it. In other words, the most dependable consumers over the next few weeks as this news spreads will be the very group B&N is fighting tooth and nail against: Those who intend to make it into the best little Tablet (you know, one with apps) it can be.

                                             

                                            Without the ability to load 3rd party apps, which today requires root, what little app access there is goes away with the B&N App store, and the future ability to read whatever library of DRM-protected ebooks the customer has accumulated is called into question if the Nook itself dies.

                                             

                                            B&N would be well served to make an immediate announcement about what safeguards it is making to ensure that, whatever the fate of the business, customer investments -- including Nook readers -- is protected. Otherwise, it's Oldsmobile all over again.

                                             

                                          • Re: Barnes & Noble To Explore Separation Of NOOK Digital Unit
                                            Omnigeek

                                            DeanGibson wrote:

                                            gb18 wrote:
                                            ...

                                            The company noted that NOOK Tablet's sales exceeded expectations, while sales of NOOK Simple Touch lagged expectations, indicating a stronger customer preference for color devices. ...


                                            Or, it could indicate a stronger customer preference for tablet-like functionality.

                                             

                                            If the quoted "customer preference for color devices" is a B&N statement (as opposed to an analyst's statement), then I wonder about B&N ...


                                            I'm not sure why you'd wonder.  It makes sense to me -- I always thought Bezos' snide remarks about color last year were sour grapes.  Heck, I didn't bother buying an ereader until the Nook Color came out because I was happy reading on my Palm Pilot and smart phone; the Kindle design just made no sense to me.  The advantages of color devices are clear if you're reading magazines like National Geographic or People or scientific or technical journals with multi-colored graphs or illustrations.

                                             

                                            Many "investors" react emotionally and act like herd animals, hence panic sells.  All in all, sounds like I missed a buying opportunity this morning.  :smileysad:

                                              • Re: Barnes & Noble To Explore Separation Of NOOK Digital Unit
                                                Mark_OB1

                                                Omnigeek wrote:

                                                 

                                                > Many "investors" react emotionally and act like herd animals, hence panic sells. All in all, sounds like I missed a buying opportunity this morning. <

                                                 

                                                Yeah, same here (re: the missed buying opportunity).

                                                 

                                                But one thing you overlooked is that many "investors"  watch things closely to see which way the wind is blowing.  Then when they sense a drop, they sell ASAP.  But as soon as they see the price level off, they buy it back again at the lower price, maintaining their holdings.  And in the process, banking a nice bit of coin for themselves.

                                                 

                                                - Mark

                                                 

                                            • Re: Barnes & Noble To Explore Separation Of NOOK Digital Unit
                                              TnTexas

                                              gb18 (from the news article): The company noted that NOOK Tablet's sales exceeded expectations, while sales of NOOK Simple Touch lagged expectations, indicating a stronger customer preference for color devices.

                                               

                                              I'm going to go out on a limb and say that that preference is probably due more to the media/tablet aspect of those devices (watching movies, playing games, surfing the web, etc.) than to the reading aspect. I think the majority of today's society prefers to get their stories through movies and TV shows rather than books.

                                              • Re: Barnes & Noble To Explore Separation Of NOOK Digital Unit
                                                patgolfneb
                                                I was under the impression that toasters OP was pretty much the plan. Gradually shrink the bm operation to basically a cafe and browsing experience for books, gifts, and childrens and family games in a smaller footprint with a few flagship stores in large urban areas. It sounds as though they are having trouble attracting investment for what is basically a startup, the nook and BN online media store which like many startups won't make money for several years. If they separate them then investors who wish to invest in future growth are seperated from a shrinking but cash flowable bm stores. Of course that also means that portion could be ch 11 to get out of leases and shrink quicker if needed..
                                                • Re: Barnes & Noble To Explore Separation Of NOOK Digital Unit
                                                  Reisnice
                                                  I actually took a lot of this into account before I bought my NT? B&N has been close to chapter 11 for so long that I would have been crazy to ignore it. If I already owned a bunch of B&N ebooks, it would bother me more, I think.
                                                  • Re: Barnes & Noble To Explore Separation Of NOOK Digital Unit
                                                    Reisnice
                                                    While I agree with robo and others' financial reasoning for possibly separating the electronics division from the brick and mortar side, having the B&N name and bookstore behind the Nook gave me a much more positive feeling than buying a Kobo or other non-'book' backed brand. Or even a Sony - a company who drops and orphans products right and left. I'm not sure the Nook line would have the same customer recognition if they fully spun it off to a new start-up. That sure worked out for Netflix, didn't it??
                                                    • Re: Barnes & Noble To Explore Separation Of NOOK Digital Unit
                                                      DeanGibson

                                                      One commentator mentioned that this would free investors to invest in the new company without worrying about the future of B&N.  If that was the goal, one consequence might be ths splitting of the Nook hardware line into two lines:  One that supports the eReader/limited tablet version for B&N, and another that provides an open Android tablet line.

                                                        • Re: Barnes & Noble To Explore Separation Of NOOK Digital Unit

                                                          Okay here are some additional thoughts on the idea of splitting off the Nook from BN...

                                                           

                                                          1. Raising Capital Like a Startup: Like alot of analysts say, it lets Nook raise capital the way a huge growth company raises capital.  The rate at which it built market share and the growth in revenue over the course of the last two years is a growth story.  A Nook stock would behave like a growth stock, attracting big investors, and fueling its continued growth and development in the future... This is essential to fund it's investments in technology and expansion. This is something it cannot do, when it is chained to Barnes and Noble, serves only the Barnes and Noble bottom line and its shareholders.  It is handcuffed and investors don't have a choice to invest purely in the Nook side, they are forced to take them both together.

                                                           

                                                          2. Attracting Foreign Investors to Generate Foreign Business:  As Barnes and Noble's CEO said, they have plans to expand globally and to seek out international partners.  What I think this means is: not that Barnes and Noble is going to start opening up shop in Japan and Germany and Russia and China... Obviously as a company it would be hugely at a disadvantage there.  Instead imagine what may be possible with a Nook Company, which is majority owned by Barnes and Noble, but which can be traded separate from the parent company.  It can be sold to partner companies.  Imagine if the Nook and it's technology and staff and talent were not a Barnes and Noble only device, but rather a technology company that was owned in part by many different international booksellers?  Recently, Kobo, a Toronto based company was sold to a Japanese company that includes one of the largest booksellers in Japan (which by the way is the worlds number one book consuming country in the world, larger than America in readership...)  But imagine if Nook, rather than simply being sold off was jointly owned by an alliance of global book sellers?  All of these international equivalents of Barnes and Nobles in their own countries, each sharing in the profit of the Nook, sharing in its development costs, and therefore each investing in the device and generating foreign language content, and using their domestic connections with local publishers to generate that content... A partner that owns a stake in the Nook becomes invested in its success.  Why does Barnes and Noble really benefit from keeping it all to itself?  Really it benefits less from the sale of the device, than from the sale of content... If Barnes and Noble were just the US store, and the Nook stores were represented by other booksellers in their own respective countries, they would all benefit from shared investment in the technology to come out of the Nook... It is a cross fertilizing relationship... Content generation, investment, and better devices, and other content... Other countries' share in the development costs, and gain access to tech to modernize books in their own countries...

                                                           

                                                          3. Make your Content Supply Join You:  Now, imagine content producers can own a piece of your device.  Not just Barnes and Noble, but for example, selling a stake to publishers of books, magazines, media companies, say Disney or production companies... Or textbook publishers... Or a piece to Netflix... Imagine *Netflix* owned a piece of the Nook... Or... *Gamestop* owned a stake in the Nook and also was investing in it, but from the Gaming side of the device while BN was investing in the reader side...

                                                           

                                                          4. Attract Top Technology Stakeholders, and Top Technology Talent:  In Silicon Valley, where the Nook is based, it's not that cool to be working for Barnes and Noble... Or at least it's not what people think of as a company that is growing and high tech and cutting edge and exciting... Allowing the Nook to have some breathing room to develop its own culture and to spread its legs a bit will potentially attract some of the top tech brass, and maybe investors who are tech veterans... The kinds of people who buy into startups like Twitter or Facebook or whatever else... Board members who aren't just people who know about books, but people who know about cutting edge technology and innovation and design... What if *Google* owned a stake in the Nook? Or *Facebook*?  How would that affect the way the device evolved?

                                                          • Re: Barnes & Noble To Explore Separation Of NOOK Digital Unit
                                                            bobstro

                                                            Ah, so we'll have B&N NOOK and B&N BOOK, or something to that effect. So when those of us who pine for the good ol' brick & mortar stores buy a Nook device, we're going to be supporting a separate company, and not really supporting the local shoppe at all, correct?

                                                             

                                                            Will it be B&N NOOK that has the arrangements with the publishers? I assume so. So the survival of B&N NOOK will be the one to watch to determine whether my library of purchased ebooks will be usable in the future, correct?

                                                             

                                                            For some reason, even your reassurances aren't making me feel any better.

                                                          • Re: Barnes & Noble To Explore Separation Of NOOK Digital Unit
                                                            patgolfneb

                                                            Two issues, first saw BN ceo on CNBC, not awe inspiring, guy comes across like a presidential canidate, stay on message, no real information, no real candor. 

                                                             

                                                            Second, a secondary market for ebooks is only possible with govt. intervention. Why because a facilltator like overdrive collecting fees to be shared with publisher, author similar to the royalty collection process for music played on the radio is only possible with such a model, their is no reason for retailers to embrace this.  I do think as the market matures that consumers ability to back up, use purchased ebooks on multiple devices may be enhanced. At some point discounting older titles is something authors and publishers should accept. Very few titles keep selling indefinitely. Right now older titles go out of print, but there is no reason that needs to happen with ebooks since marginal costs are so low. This would allow authors to receive a longer income stream, copyright doesn't guarantee your book stays in print.  Why not take advantage of the pricing flexibility online retail offers to attract bargain hunters this way.  New and bestsellers will retain the price premium just like in other media.

                                                              • Re: Barnes & Noble To Explore Separation Of NOOK Digital Unit
                                                                roustabout

                                                                Pat, my feeling is that there is no need for further government intervention to create the used ebook market.

                                                                 

                                                                All that is needed is for someone to be able to ensure that once you sell an ebook, its further use conforms to the doctrine of first sale, which has been law in the US on book sales for a century.

                                                                 

                                                                I think that to see ebooks as fundamentally different from books is to surrender existing rights.  What will be needed is for a player with deep pockets and serious computing power to fight for those rights in court, but Google is such a player.  If anyone can convincingly demonstrate that a used ebook ownership is truly transferred irrevocably, both from the computing platform side and with the lawyers to back the claim, it's Google.

                                                                 

                                                                The publishers, Amazon, BN, Apple - none of these players is likely to be interested, since used ebooks will lower their margins. 

                                                                 

                                                                Lower profit margins for those businesses does not mean that the right of resale should be forfeited, though. 

                                                                  • Re: Barnes & Noble To Explore Separation Of NOOK Digital Unit

                                                                    roustabout wrote:

                                                                    Pat, my feeling is that there is no need for further government intervention to create the used ebook market.

                                                                     

                                                                    All that is needed is for someone to be able to ensure that once you sell an ebook, its further use conforms to the doctrine of first sale, which has been law in the US on book sales for a century.

                                                                     

                                                                    I think that to see ebooks as fundamentally different from books is to surrender existing rights.  What will be needed is for a player with deep pockets and serious computing power to fight for those rights in court, but Google is such a player.  If anyone can convincingly demonstrate that a used ebook ownership is truly transferred irrevocably, both from the computing platform side and with the lawyers to back the claim, it's Google.

                                                                     

                                                                    The publishers, Amazon, BN, Apple - none of these players is likely to be interested, since used ebooks will lower their margins. 

                                                                     

                                                                    Lower profit margins for those businesses does not mean that the right of resale should be forfeited, though. 

                                                                     __________________________________________________________________________

                                                                     

                                                                    There does seem to be a lot of people who want B&N management to put on the short skirt and lipstick and sashay in front of the google front porch.  My guess is they've been courting various suitors behind the woodpile already.  Whether it turns into a marriage or just a couple dates remains to be seen.  I think we'll know by spring though. 


                                                                     

                                                                      • Re: Barnes & Noble To Explore Separation Of NOOK Digital Unit
                                                                        roustabout

                                                                        Mohawks writes "There does seem to be a lot of people who want B&N management to put on the short skirt and lipstick and sashay in front of the google front porch. My guess is they've been courting various suitors behind the woodpile already. "

                                                                         

                                                                        Yes, BN has been trying to sell itself off for more than a year now.  

                                                                         

                                                                        Apparently, the doctor's report on the company as a whole indicates that before consummation would be healthy, more than a small dose of penicillin would be needed.  Liberty Capital invested a lot of dough after the collapse of an attempt last year take the company private.   

                                                                          • Re: Barnes & Noble To Explore Separation Of NOOK Digital Unit
                                                                            steffiebaby140

                                                                            You know, I find myself reminded of a similar panic/meltdown right after I bought my N1E.  Within a month there were articles that the company was exploring selling the company's stock or privatizing the company.  I remember the stock problems, I remember the concerns, I remember the articles announcing the downfall of B&N, and I remember the pages of posts asking if B&N was going out of business.  And look, its been 2 years since then and 3 new Nook products.  Companies that are going under, or worried about going under, don't invest millions of dollars in new digital products lol. 

                                                                             

                                                                            I will take this seriously when it becomes more than speculations and conjecture rather than jumping on the bandwagon of panic and worry.  Ultimately, if B&N goes down, I have copies of all my B&N ebooks saved to my hard drive and a flash drive.  My nook will still be functional even if the company doesn't exist.  Even if my Nook somehow explodes at the same time, I have my ebooks saved independently of B&N servers and will be able to either convert their format, continue to read them from my computer, or transfer them to a new device.  And let's not forget, if my Nook is still working I can still buy ebooks from somewhere else and sideload them, so really its not like the world would end even if all this speculation turns out in the worst possible solution.

                                                                              • Re: Barnes & Noble To Explore Separation Of NOOK Digital Unit
                                                                                flyingtoastr

                                                                                By the way, here is the video of Lynch saying EBITDA a billion times. :smileyhappy:

                                                                                • Re: Barnes & Noble To Explore Separation Of NOOK Digital Unit

                                                                                  ^^^ Did you mean:  "In a perfect world the chicken would be able to cross the road without his intentions being questioned."?

                                                                                    • Re: Barnes & Noble To Explore Separation Of NOOK Digital Unit

                                                                                      I just listened to the Lynch interview and he said this is an exploratory venture which to me means to channel energies to create some needed buzz!  This is his way to capitalize on people's perceptions that if you want a book you go to B&N..one of the last Brick and Mortar stores left. Something Amazon and Apple do not have. And this talk about synergy...well hell yeah!  It ain't going anywhere!  If they do nothing then this was all for not for me and they better get more apps and higher quality Support when we really need it. Fellow Users cannot be the only providers though they/we do provide a higher quality base to generate buzz around the Nook - IMHO as actual Users! 

                                                                                       

                                                                                      Here is some rambling.....If we were to just sit back and do nothing I think Lynch would freak because if we are going to be his test-bed and extension of product development then relying on them could proof fatal to get that growth factor he undeniably needs. He clearly doesn't want to jeopardize that rich vein of activity. I guess we should now wait to hear from the Amazon's CEO for a similar point-of-view on the fact these products are basically profitless because they rest on the profits from sold books, mags,apps, and accessories where Apple's price-point is considerably higher but making a decent profit on the hardware.

                                                                                       

                                                                                      And here is some more rambling...I wouldn't hold my breath for any fast changes and I think our Nooks are safe for quite some time. As conservative as B&N is 5% growth isn't bad at all in this economy and as people have extra $$$ to spend that will easily be used to easy expenditures that B&N sells. Look at all the money we throw at cell phones and data plans. Anything to make our life easier is what it is all about and I seriously think Lynch is aware of it and perhaps wants to capitalize that he is a candidate in being a representative of up and coming emerging and cutting edge technology.  Who else right now is sticking their neck out?  Anyone?

                                                                                        • Re: Barnes & Noble To Explore Separation Of NOOK Digital Unit

                                                                                          I gave my gut impressions of Lynch's interview a couple posts back in this thread and I stand by them.  But just to play Devil's advocate and sooth the niggling ache in the back of my mind I still have two doubts.

                                                                                           

                                                                                          1.  B&N pretty much put all the bookstore sellers out of business with the help of Amazon.  Walden, Borders and others, all gone.  B&N is the only fish left in the hardcover bookstore market.  My question is, "What happens when the big fish has eaten all the little fish in the pond and there's no food left?"

                                                                                          Downsizing the B&M won't help as you can buy the NYT bestsellers from any Walmart, QVC, Walgreens and other consumer boxes at discounted prices.

                                                                                           

                                                                                          2.  If I believe Lynch, then everything is fine and everything will be fine moving forward.  Spinning off the Nook makes perfect sense if one wants to modernize the business model and stay competitive.  But what if the real reason is to sell off the assets for the highest dollar value?  First, one tries to sell the whole house, furniture and all like B&N tried last year.  If that doesn't work, then you hold a yard sale and sell everything piece by piece and then slip out the backdoor before the Bank comes for the mortgage money.  Not projecting this......but could happen.  Both scenarios are possible under the  current set of circumstances. 

                                                                                           

                                                                                          Oh hell, maybe I'm just being paranoid.  Nevermind....just move along.....nothing to see here. 

                                                                                            • Re: Barnes & Noble To Explore Separation Of NOOK Digital Unit
                                                                                              moose_tracker

                                                                                              If B&N sold everything off in pieces, then I go back to what I stated earlier, and other people have said.. Someone will buy the customers base who own the Nook if not the Nook itself.. And do a major upgrade to the devices so that you now play in their walled garden..

                                                                                               

                                                                                              Maybe google, maybe Liberty Media, maybe Microsoft, maybe Kobo, maybe BAM, maybe even Amazon (although I think if B&N had a choice that would be te last company they sell to.)..

                                                                                               

                                                                                              It is too lucrative of a buisness for someone not to want to want this customer base..

                                                                                               

                                                                                              And besides that we are the bestest customers a company could every hope to have.. (we never bicker, we never complain, we always except whatever the company throws at us without any questions).. :smileyvery-happy:

                                                                                  • Re: Barnes & Noble To Explore Separation Of NOOK Digital Unit
                                                                                    patgolfneb

                                                                                    roustabout wrote:

                                                                                    Pat, my feeling is that there is no need for further government intervention to create the used ebook market.

                                                                                     

                                                                                    All that is needed is for someone to be able to ensure that once you sell an ebook, its further use conforms to the doctrine of first sale, which has been law in the US on book sales for a century.

                                                                                     

                                                                                    I think that to see ebooks as fundamentally different from books is to surrender existing rights.  What will be needed is for a player with deep pockets and serious computing power to fight for those rights in court, but Google is such a player.  If anyone can convincingly demonstrate that a used ebook ownership is truly transferred irrevocably, both from the computing platform side and with the lawyers to back the claim, it's Google.

                                                                                     

                                                                                    The publishers, Amazon, BN, Apple - none of these players is likely to be interested, since used ebooks will lower their margins. 

                                                                                     

                                                                                    Lower profit margins for those businesses does not mean that the right of resale should be forfeited, though. 


                                                                                    I don't disagree with you, but to this point the success of companies in redefining digital content as licensed use and the continued attempts at even more draconian distinctions does not give me hope. After all the the passage of laws supporting DRM and removing traditional first use rights they have to at least be part of the decision. Right now the anti piracy argument put forward by business has a lot more support in congress than the inconvenience and loss of legitimate uses by consumers. I would say more but this could turn into another sideloading thread, horrors.
                                                                                      • Re: Barnes & Noble To Explore Separation Of NOOK Digital Unit
                                                                                        Omnigeek

                                                                                        I absolutely do NOT want any more government intervention in the marketplace.  The federal government has already exceeded its authority under Articles I and II and the Tenth Amendment, why would we want them to stifle innovation and competition even more?  Under what argument would the federal government have any say in whether consumer A sells used legal product B to consumer C in a private transaction -- whether aided by a private company exchange or not?

                                                                                         

                                                                                        What we need is for them to repeal the DMCA and Copyright extensions that created this situation in the first place but allow the IP protections necessary to encourage a thriving market.  I believe the private sector can come up with this arrangement much better than government bureaucrats.

                                                                                          • Re: Barnes & Noble To Explore Separation Of NOOK Digital Unit
                                                                                            roustabout

                                                                                            OG writes "repeal the ... Copyright extensions that created this situation in the first place"

                                                                                             

                                                                                            Let me know when you think Congress is ready to stand up to Disney and the various other weird outcomes of the Mickey Mouse Protection act.  :smileyhappy:

                                                                                             

                                                                                            I completely agree - the indefinite extension of copyright means that, for instance, publishers no longer have to publish work that's even as good as their 20 year old back catalog material.  If copyright hadn't been extended, publishers today would be competing against bespoke rebindings of classics from Nabokov, Orwell, etc - a situation that they don't find themselves in, so they can instead shift Koontz by the truckload.   

                                                                                             

                                                                                            "allow the IP protections necessary to encourage a thriving market. I believe the private sector can come up with this arrangement much better than government bureaucrats."

                                                                                             

                                                                                            The law permitting all this to happen is already on the books.

                                                                                             

                                                                                            But you know what's interesting?  Right now, the only analog to a "used" ebook market is in the subsidized ebook lending run by those awful Stalinists down at your local public library :smileyhappy:   

                                                                                            • Re: Barnes & Noble To Explore Separation Of NOOK Digital Unit
                                                                                              flyingtoastr

                                                                                              Omnigeek wrote:

                                                                                              I absolutely do NOT want any more government intervention in the marketplace.  The federal government has already exceeded its authority under Articles I and II and the Tenth Amendment, why would we want them to stifle innovation and competition even more?  Under what argument would the federal government have any say in whether consumer A sells used legal product B to consumer C in a private transaction -- whether aided by a private company exchange or not?

                                                                                               

                                                                                              What we need is for them to repeal the DMCA and Copyright extensions that created this situation in the first place but allow the IP protections necessary to encourage a thriving market.  I believe the private sector can come up with this arrangement much better than government bureaucrats.


                                                                                              Not that I'm a fan of the DMCA, but your second paragraph is completely untenable without large government intervention efforts.

                                                                                               

                                                                                              First Sale works well for any physical media - you buy one copy and can then do whatever you want with that one copy. With digital content it is completely different - you buy one copy and can then copy that file and do whatever you want with the unlimited number of copies you now possess. So unless someone can come up with an ebook format that is impossible to copy, publishers and authors are going to insist on some sort of copyright protection - DRM.

                                                                                              • Re: Barnes & Noble To Explore Separation Of NOOK Digital Unit
                                                                                                patgolfneb
                                                                                                Omni you refered to the constitution, stating gov has exceeded its powers? The sections you cited have multiple parts, mostly pertaining to states rights, modified later by other amendments, primarially the 14th. Which subsection, specifically especially considering the effect of future amendments has been exceeded.