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

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.

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Topics: Tablets, Amazon, Android, Mobile OS

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

    There's an interesting bit of market evolution going on around the whole topic of "what we read/view and how we read/view it". I'll use myself as an example:

    With the internet providing dynamic information much more cleanly, easily and cheaply than print periodicals can, I've all but completely abandoned use of paper periodicals. I see no point in paying for a slower, messier, tree dependent way of gathering dynamic information. And since the world of magazines never learned NOT to split gorgeous images over a page crack, the potential benefit of large format magazines for image presentation is nearly entirely lost.

    I've been a user of ebooks and audio books for quite a few years, and I enjoy them very much ... but I have not lost my taste for paper books or stores in which I can look at said books and decide whether or not I want to buy a copy. As handy and affordable as e-books are, they do not provide the same overall experience as paper books, simply because they are a) not paper and b) can not be consumed in the wide range of physical sizes that paper books can. I can put books of many different sizes in one book shelf, but I can't sit under a shade tree with a HUGE e-book reader to enjoy my favorite large format art, photography and coffee table books. E-readers are wonderful, but they can't fulfill the full range of desired reading/viewing experiences, and so books continue to flourish.

    I agree with that camp which sees ebook readers as a welcome addition to the world of reading, but does not see them fully replacing print books any time soon, any more than computer art software has replaced the oldest media in the known art world ... charcoal. You can STILL buy it at the local art store, because it provides a different sensory experience than something created on and consumed by an electronic device.

    Humans are sensory and emotional beings as well as intellectual entities. We enjoy having different kinds of physical and emotional experiences as we consume information, and thus we enjoy some degree of variation in the means through which we experience various media. When the difference matters to us, we're willing to pay extra for that experience. When it doesn't, we aren't. As long as books provide an enjoyable additional way of experiencing some forms of text and image media, they will persist, as will stores in which we can review them before buying.
  • RE: John Malone's Liberty Media bid for Barnes & Noble was a smart move

    I haven't jumped on the e-reader bandwagon yet because I don't want to dedicate myself to any provider or platform but im starting to feel the itch to make my next book an e-book. Problem is, it needs to be compatible with my Windows Phone 7 device and Amazon does provide an app but I still have a membership with B&N because I really like going to stores to check out books im interested in.
  • RE: John Malone's Liberty Media bid for Barnes & Noble was a smart move

    Could be, and I am all for anything that will keep them going. We love going to B&N to browse books and relax. Considering buying a Nook, too.
  • Great if you live in the US

    All this hype about the Nook and B&N, but if you live in Australia the Nook is not available, nor has B&N the rights to sell books here.
    Australia may be a small market compared to the US but the Kindle has made good inroads here as there is nothing else worthwhile to compare. Plus the majority of books on Amazon are also available here.
    What about the UK and other English speaking parts of the world? Amazon is the only worthwhile supplier.
    For Liberty to really make their money work they need to add the rest of the world to their plans. There is a world outside the US.