Barnes & Noble soon to add more tablet functionality to Nook Color

Chris Meadows, TeleRead:: "Barnes & Noble has announced a big update for the Nook Color e-reader coming in April which will include a number of new functions such as applications and email, essentially bringing the LCD e-reader closer to being a full-fledged Android tablet. ... "

No Buyers for Barnes & Noble at 60 Cents on Dollar

Businessweek:

Even with Barnes & Noble Inc. selling for 60 cents on the dollar, the cheapest retailer in America still isn’t cheap enough to entice private-equity buyers looking for cash. 

The bookseller founded by Leonard Riggio has fallen 28 percent since putting itself up for sale seven months ago, according to data compiled by Bloomberg. Losses accelerated after the New York-based company eliminated its dividend in February, leaving Barnes & Noble at a 15-year low last week. The chain is the only U.S. retailer with a value of more than $500 million trading at a discount to its net assets, the data show. 

Barnes & Noble destroyed 80 percent of its shareholders’ value since rising to a record five years ago as Riggio, who bought the bookstore in 1971, fell behind Amazon.com Inc. in selling books over the Internet and starting an electronic reader business. Now, with Barnes & Noble piling money into its Nook reader to compete with the Kindle and Apple Inc.’s iPad and analysts projecting its first loss in a decade, the only buyer left may be Riggio himself as private-equity firms back away after the bankruptcy of Borders Group Inc., according to Wall Street Strategies Inc. in New York. 

“There’s not much to like,” said Brian Sozzi, Wall Street Strategies’ retail analyst. “One thing I’ve learned in retail is once the model starts to go against you it’s tough to pull yourself out. Assets on their books are losing value so quickly. Other than Riggio, I don’t know who else would want it.” ...

Nook Color Android app store coming in April along with Flash support

Crave - CNET: "While plenty of people have "rooted" their Nook Colors with custom firmware that allows them to access the Android Market and download applications, most Nook Color buyers have stuck with the official firmware that came with the device. If you're in the latter group, you'll be happy to note that you'll soon have access to Barnes & Noble's version of an app store, which is due to launch in April, according to the HSN Web Site, where the Nook is being sold for $299.90."

Barnes & Noble Struggles to Find a Buyer

Note: Kindle = 67% eReader market. Nook = 22%. BloggingStocks: "The biggest threat to Barnes & Noble emerged over the past few years as the more and more readers made the switch from actual books to digital books. The company's main competitor, Amazon.com, Inc. (AMZN) was quick to capture this market with its e-reader Kindle. Barnes & Noble have come out with their own e-reader, the Nook, but sources close to the company said that one reason buyers are backing away from a potential purchase of the company is due to the length of time it will take for the company to increase its digital sales. ... "

Google Says Microsoft Patent Lawsuit Threatens Innovation

PCWorld: "'Sweeping software patent claims like Microsoft's threaten innovation,' Google said in a statement. 'While we are not a party to this lawsuit, we stand behind the Android platform and the partners who have helped us to develop it.'"

Microsoft v. Android: now B&N Nook gets software patent lawsuit

Computerworld Blogs: "Microsoft is suing more Android device makers: now it's Barnes & Noble with it's partners Foxconn and Inventec. Steve Ballmer's gang doesn't like B&N's Nook e-reader, so has slapped them with a software patent lawsuit."

B&N Pines for a Storybook Ending

WSJ: "It's never fun to realize, after starting a book, that the plot is so familiar it loses any element of surprise. The question for Barnes & Noble shareholders is whether they are living such a predictable tale. The stock's 47% plunge in the past three weeks, to below $10, its lowest point since the early 1990s, suggests investors feel that way. Last month's suspension of the dividend, to preserve cash for digital investments, likely sent income-oriented investors heading for the exits. But despite Barnes & Noble's claim to be 'now a growth company,' growth investors appear to be staying away—with good reason."

The chain gets smaller margin on eBooks than on physical books, the latter market shrinking as the former grows. It also has the brick-and-mortar monkey on its back, plus:

"It doesn't help that Barnes & Noble has taken on long-term debt for the first time in several years, partly to fund the $596 million cash buyout in 2009 of the Barnes & Noble college-store chain from Len Riggio, chairman and 30% shareholder. The price paid was more than Barnes & Noble's now-shrunken market capitalization. While the college chain's earnings have proved valuable as Barnes & Noble invests in digital, its sales at stores open more than a year have declined since the purchase. The deal would have looked better for Barnes & Noble shareholders if Mr. Riggio had taken stock rather than cash."

My late father-in-law Bill Bartkovick, a longtime Senior VP at B&N, founded the Barnes & Noble College Division. He would be the first to tell you that this division's days are numbered [see story below], and that the deal benefited Lenny and his family entirely at the expense of shareholders.

Len Riggio: American trade on cusp of "transformational growth"

If I were Lenny, I wouldn't mention Borders either. The Bookseller: "Barnes & Noble chairman Len Riggio has said the American book trade is on the cusp of 'transformational growth' led by digital sales, in a bullish keynote address to the annual meeting of the Association of American Publishers (AAP), in which he stated that that the book chain remained 'committed now as ever to the future of [its] stores'. Riggio did not talk about B&N's falling share price or whether he might buy the company back; he did not mention Borders. ... "

As Borders Sinks, Barnes & Noble Scrambles to Remain Afloat on Troubled Waters

TIME: " ... the question is how long Barnes & Noble can stay ahead of the gradual shift from print to digital. Barnes & Noble still has 705 bookstores in the U.S., and those locations are less profitable than they used to be, though that drop seems to be slowing. Worse, its online operation continues to lose money. Overall, Barnes & Noble's profits in its most recent quarter, which ended in January, fell 25% from a year earlier to $60.6 million. In order to stem the losses, Barnes & Noble's executives decided recently to stop paying stockholders a dividend and invest the money in its online and e-books division to boost growth."

Dealtalk: Barnes & Noble auction gets case of writer's block

Reuters: "Barnes & Noble Inc's (BKS.N) efforts to find a buyer have slowed to a crawl, erasing recent gains in its stock price, as potential suitors question the bookseller's ability to compete against formidable rivals. ... "

Barnes & Noble/Spring Design settle lawsuit over Nook feature

Yahoo! Finance: "NEW YORK (Reuters) - Barnes & Noble Inc has settled a lawsuit brought against it by Spring Design, which had accused the top U.S. bookseller of illegally copying a screen design for its popular Nook electronic book reader. Under terms of the agreement, Spring is granting Barnes & Noble a non-exclusive license for all of its patents and patent applications. Other terms of the settlement were not disclosed."

Crush or Get Crushed: Why B&N Needs to Be a Publisher

Michael Wolf: "Let’s face it, the total pie in books is going to shrink, and the long and unwieldy value-chain from writer to customer is going to collapse. Amazon knew this a long time ago, and that’s why they’ve been moving to disintermediate the publisher and the wholesaler in the e-book world by becoming, essentially, the entire value chain themselves. B&N should do the same, and do it quick. Sure, like Amazon, it launched its own self-pub platform in PubIt!, and it tinkered around with a few imprints on the print side for some time. But in the collapsing world of books, it’s every man for himself, and its time for B&N to accelerate its push into becoming a digital publisher."

Publishers Look Beyond Bookstores

Coming to a bait and tackle shop near you. NY Times: " ... Publishers have stocked books in nonbook retailers for decades — a coffee-table book in the home department, a novelty book in Urban Outfitters. In the last year, though, some publishers have increased their efforts as the two largest bookstore chains have changed course. Barnes & Noble has been devoting more floor space for displays of e-readers, games and educational toys. Borders, after filing for bankruptcy protection in February, has begun liquidating some 200 of its superstores. ... "

E-commerce drives Q3 growth for Barnes & Noble

- Web accounted for 89.3%—$150 million—of all growth in the latest quarter, per Internet Retailer.

Barnes & Noble 3Q net income falls

Yahoo! Finance: "NEW YORK (AP) -- Book seller Barnes & Noble's third-quarter revenue rose, but its net income fell 25 despite higher revenue as it continued to invest in its online operations and Nook e-readers, the company said Tuesday. Barnes & Noble also said it was suspending its quarterly dividend, and it doesn't plan to forecast its fourth-quarter or full-year earnings due to the effect of last week's bankruptcy filing by Borders Group."

Books Beyond Borders

Megan McArdle, The Atlantic: "At least Barnes and Noble should be happy; this erases their biggest competition for bricks-and-mortar pure brick retailing. But looking to the future, they too have to be nervous. All that real estate is expensive, and their margins are under pressure from Wal-Mart on the bricks-and-mortar side, and Amazon on the web. One wonders if the Nook can really make up for those competitive disadvantages."

B&N's Nooknewstand (the Combo of Nookmagazine & Nooknewspaper) a Success Thus Far

Readers get here what they can't on iPad: subscriptions. Crave - CNET: In a press release, Barnes & Noble says, 'Digital periodical sales are exceeding expectations with more than 650,000 total subscriptions and single copy sales driven by Nook Color customers reading interactive versions of all of their favorite newspapers and magazines ... .'"

Digital Subscription Numbers from Barnes & Noble

PW: "Barnes & Noble ... said since the launch of the Nookcolor it has sold more than 650,000 total subscriptions and single copy sales of digital editions of newspapers and magazines. Since Christmas Day customers have already ordered 150% more subscriptions than the total number sold over the entire previous 12 months, B&N said."

Barnes & Noble Cuts Staff Associated with Paper Book Programs

As B&N's sales of (and emphasis on) paper books diminishes, so does the staff associated with those operations. PW: "Barnes & Noble has confirmed what it is calling 'a small number of organizational changes this week' that the retailer said were 'designed to better align our resources with our business.' The changes appear to be mostly in the buying group. ... "

Borders Death Watch, Vol. 2 (Updated)

Gawker:

When we last checked in with second-place book chain Borders, the company was teetering on the edge of financial doom. And now? Borders is gazing into the abyss, preparing to jump.

• Borders has hired a law firm to advise it on bankruptcy and restructuring. You know what that means! (Bankruptcy.) The company's also trying to land a $500 million credit line, to "provide a bridge for the company over the next six to 12 months while it rearranges its business." Hopefully they can rearrange into selling something better than books.
• But hey, rumors that they'd get that loan really helped out the stock.
• Last week, Borders announced that it's cutting more than 300 jobs by closing a distribution plant in Tennessee; the company also cut 15 management positions.
• Analysts are skeptical that there are any merger possibilities that would work for Borders. Barnes & Noble stands to gain an estimated $400 million in sales if Borders folds.
• UPDATE: A tipster emails, "Borders HQ is laying off employees at Ann Arbor office as I type this." And, confirmed—45 layoffs today.