Inside the e-wars: Barnes & Noble Woes and the Digital Marketplace: A 1-2 Punch

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Borders and Barnes & Noble used to be great. The #1 and #2 booksellers in the U.S., building out new superstores like they were going to grow forever. Three years ago, a new Borders was built in Olympia. It's just down the road. It's a big, beautiful store with thousands of books on its shelves and a big friendly atmosphere. It's the kind of place you want to go in and browse. And it's just down the street from the big, beautiful Barnes & Noble that has always been a favorite of mine.

Now Borders is in bankruptcy, trying to stave off the grim reaper by closing up to half of its stores. Barnes & Noble is having no luck finding a buyer, and it's prospects don't look good. On Feb 15 (three weeks ago) Barnes & Noble stock was flying at $18.69 on hope of a takeover that had buoyed the stock, raising it 47% from earlier lows. Now, as I write this the stock is falling below $12, headed to multi-year lows based on fears that the company may follow Borders into oblivion. The two seem to share the same business model, a reliance of brick and mortar bookselling, or do they? Not really, in my opinion.

Barnes & Noble has operated its own web operation for as long as I can remember. The web site doesn't get the amount of visitors or business as Amazon, but it could. Barnes & Noble developed its own e-readers: the Nook and the NookColor. The e-readers aren't as popular as Amazon's kindles, but they could be. There's a lot of potential, but Barnes & Noble will have to move carefully as the company works to reinvent itself. A few wrong steps could be the end.

I for one hold out hope that Barnes & Noble will get the hat trick just right and emerge a stronger company in a few years. It could be a rocky few years, but I'm hopeful. For now though, the company seems to be doing some things right, especially in the e world. More and more of my readers tell me they're done with Amazon, and will never buy from Amazon again. If that kind of trend grows, that's likely good news for Barnes & Noble, but there are many players in the digital book world. Big players like Sony and Apple are out there. Google and others too.

And where's Microsoft in all this? Zune marketplace. But why do I have to download and install separate software? Why isn't the Zune marketplace better? Where's the spoken-word audio? Where are the e-books? (And no, I don't want these offerings via other people's apps!) Why is it so hard to contact the business dev team and get a contract when there should be great big sign posts and open invites because the marketplace needs a flood of new deals to compete with Apple, not a trickle.

Information is the future. Digital content is the future. More competition will bring more innovation. I hate that iTunes is my only real choice for most of the digital content I want.

Thanks for reading, time for me to get back to work! Hope you'll take a look at my book Windows 7: The Definitive Guide. Also out is my book Exchange Server 2010 Administrator's Pocket Consultant.

William R. Stanek
williamstanek at aol dot com
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