Microsoft invests half billion in the Nook, making it more valuable than Barnes and Noble

Microsoft and Barnes & Noble have teamed up to compete against Apple and Amazon in the eBooks business. The new partnership sees Microsoft investing $300 million in a new Barnes & Noble subsidiary.

The $300 million investment in the Nook subsidiary of Barnes & Noble gives Microsoft about 17.6 percent ownership of this business unit. That values this part of the business at about $1.7 billion. Before the markets opened this morning, the Nook business was valued about $900 million more than Barnes & Noble itself.

via GigaOm

 

In addition, Microsoft is paying another $305 million to get Nook on Windows 8 with some content:

Microsoft will be paying the Barnes & Noble subsidiary $180 million for revenue sharing on the Nook app that B&N will make for the Windows 8 platform. This is nonrefundable, the filing notes. Microsoft is also paying $125 million (equal to $25 million over five years) “for purposes of assisting NewCo in acquiring local digital reading content and technology development.” This, too, looks to be nonrefundable.

via Techcrunch

To put that in perspective, in the last quarter Barnes and Noble made $52 million in profit (on $2.4 billion in sales), and Amazon pulled in $130 million in profit (on $13 billion in sales). Clearly, Amazon has a big edge over B&N.

But, when you look at Microsoft’s earnings for the last quarter, $5.1 billion in profit (on $17 billion in sales), it looks like the big dog just entered the game. But, don’t forget that Apple is on the scene as well.

Clearly, the e-reader battle is just heating up and everyone wants a piece.

***

On a side note, Target just announced they are pulling all Kindle’s from their stores due to ‘showrooming.’ The practice of visiting Target to physically touch a product, so you can then buy it on Amazon.

The rise of e-reading in America

28% of Americans age 18 and older own at least one specialized device for e-book reading – either a tablet or an e-book reader.

The holiday season saw a huge boost in ownership for both e-readers and tablets. Both jumped 9%, meaning that nearly one in ten Americans received a device over the holidays.

The average reader of e-books says she has read 24 books in the past 12 months, compared with an average of 15 books by a non-e-book consumer.

78% of those ages 16 and older say they read a book in the past 12 months.

Overall, those who reported reading the most books in the past year include: women compared with men; whites compared with minorities; well-educated Americans compared with less-educated Americans; and those age 65 and older compared with younger age groups.

30% of those who read e-content say they now spend more time reading, and owners of tablets and e-book readers particularly stand out as reading more now. 

The longer people have owned an e-book reader or tablet, the more likely they are to say they are reading more.

The prevalence of e-book reading is markedly growing, but printed books still dominate the world of book readers. 

In our December 2011 survey, we found that 72% of American adults had read a printed book and 11% listened to an audiobook in the previous year, compared with the 17% of adults who had read an e-book.

There are four times more people reading e-books on a typical day now than was the case less than two years ago.

10x more stats at – The rise of e-reading, Pew Internet

 

And, a fun ending:

Why people like to read. 

King for a day: The internet finally takes down books, cd's, and dvd's

Rumors are swirling that Borders bookstores is shutting down 400 stores and laying off 11,000 employees. Which may be the kill shot from the internet we have been talking about for years.

First, it stinks that several thousand folks are going to be out of work. I always liked bookstore employees because they are the friendliest in the retail world.

If you look to Barnes and Noble, the titan of bookstores, they too are on the chopping block. Up for sale with a potential buyer, the company is losing money every quarter. The strongest segment of the business is their e-book reader, the Nook, and the corresponding e-book sales.

This all means that book superstores are going the way of the Dodo bird.

The movie business is already done. Blockbuster is in the process of closing 1,000+ stores. Hollywood Video is in bankruptcy and, for me, they even tore down the building at the one I used to work at in Westwood!

The sales of DVD’s also plummeted 20% in the first quarter of 2011.

I can’t remember the last time I bought a DVD.

Music and CD sales have been done for a while. The stores that used to sell CD’s: Wharehouse, Virgin Megastores, Tower Records, and others are now just fading memories. The empty stores they left behind only show a passing resemblance to the hotspots they once were.

Here is a chart that shows 2009 sales of CD’s lowering back down to 1985 levels.

King for a day.

The internet has finally overcome and I say it’s for the better. Music is not dead, movies are still alive, and I’m reading more books than ever.

Perhaps the megastores, big boxes, and local DVD stores are gone. But, in their place I think we can expect more mom/pop used book stores, cult favorite CD stores (Amoeba music), and on-demand movies.

It’s a plus for all of us!

Right?

King for a day: The internet finally takes down books, cd’s, and dvd’s

Rumors are swirling that Borders bookstores is shutting down 400 stores and laying off 11,000 employees. Which may be the kill shot from the internet we have been talking about for years.

First, it stinks that several thousand folks are going to be out of work. I always liked bookstore employees because they are the friendliest in the retail world.

If you look to Barnes and Noble, the titan of bookstores, they too are on the chopping block. Up for sale with a potential buyer, the company is losing money every quarter. The strongest segment of the business is their e-book reader, the Nook, and the corresponding e-book sales.

This all means that book superstores are going the way of the Dodo bird.

The movie business is already done. Blockbuster is in the process of closing 1,000+ stores. Hollywood Video is in bankruptcy and, for me, they even tore down the building at the one I used to work at in Westwood!

The sales of DVD’s also plummeted 20% in the first quarter of 2011.

I can’t remember the last time I bought a DVD.

Music and CD sales have been done for a while. The stores that used to sell CD’s: Wharehouse, Virgin Megastores, Tower Records, and others are now just fading memories. The empty stores they left behind only show a passing resemblance to the hotspots they once were.

Here is a chart that shows 2009 sales of CD’s lowering back down to 1985 levels.

King for a day.

The internet has finally overcome and I say it’s for the better. Music is not dead, movies are still alive, and I’m reading more books than ever.

Perhaps the megastores, big boxes, and local DVD stores are gone. But, in their place I think we can expect more mom/pop used book stores, cult favorite CD stores (Amoeba music), and on-demand movies.

It’s a plus for all of us!

Right?