John Malone's Liberty Media bid for Barnes & Noble was a smart move

Summary:Liberty Media Corp. recently revealed its surprising bid for Barnes & Noble. Following the announcement of a new Nook on the way, it looks as though this move was the right one.

Liberty Media Corp. recently revealed its surprising bid for Barnes & Noble. Following the announcement of a new Nook on the way, it looks as though this move was the right one.

Liberty's plan consists of an offer to buy up 70% of B&N at a rate of $17 per share, valuing the bookseller at $1.02 billion.

It's not too hard to guess why Liberty Media would be interested picking up a bookstore company. Tablets are all the rage these days, but only one (which is technically still advertised as an e-reader) stands out among the Android-based offerings: the Nook Color. According to The Wall Street Journal, the motivation behind the proposal is that Liberty Media execs are betting on the success of B&N's e-book reader collection of devices:

Liberty Media Chairman John Malone and chief executive Greg Maffei told investors Monday that the potential for the Nook platform to become the e-book application of choice for consumers on all tablet devices built on Google Inc.'s Android operating system helped motivate the company's bid for the ailing bookstore chain.

Additionally, Liberty Media execs are hoping to gain popularity with publishers who might not want Amazon and its Kindle to get too big and dominating. Furthermore, maybe retail bookstores aren't such a bad idea:

As for the potential of the Nook software business for selling e-books, Malone compared it to Gillette's success in selling razors, but he noted the business could be scaled across any Android device without being limited to those made by any one company. That said, he stressed his belief that the financial woes of its chief retail competitor, combined with its strong brand and store presence, will give the company's physical stores an enduring role.

Although, eventually these will likely be scaled down in number as eBookstores continue to grow. If only Borders execs had thought that far ahead. But that's another story.

Going back to Tuesday's introduction of a new Nook, it reinforces how far Barnes & Noble is ahead of the competition in terms of the diversity and evolution of its digital reader catalog. Although the original Nook Wi-Fi/3G will soon be obsolete once stock has depleted, it still has the 7-inch Nook Color and now a new model with a more compact form factor.

Comparatively, Amazon's latest-generation Kindle Wi-Fi also retails for $139 with a 6-inch e-Ink Pearl display. The new Nook sports the same screen size with touch capabilities, but again, is smaller and runs faster.

It's hard to tell whether or not this Nook will do better than the Kindle 3 or not (especially considering reps for both of these companies only affirm that sales have been satisfactory and in the "millions), but at least B&N is continuing to step up the e-reader game when a little over a year ago it seemed Amazon might have won hands down. Even though Amazon is likely going to unveil a tablet later this year, it's going to need to be competitive with pricing and specs to match the Nook Color, which has turned out to be one of the most popular e-book readers and tablets currently on the market.

Nevertheless, B&N hasn't won the battle yet. Overall, the company needs a serious boost and Liberty Media could be the trick. If B&N's success with the Nook brand continues, then Liberty Media picked the right company to back.

Related coverage on ZDNet:

Topics: Tablets, Amazon, Android, Mobile OS

About

Rachel King is a staff writer for CBS Interactive based in San Francisco, covering business and enterprise technology for ZDNet, CNET and SmartPlanet. She has previously worked for The Business Insider, FastCompany.com, CNN's San Francisco bureau and the U.S. Department of State. Rachel has also written for MainStreet.com, Irish Americ... Full Bio

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