Any one else worried about Barnes and Noble . . . ?

[RobertLCollins]

I'm not too worried about B&N. They have their own online store, which Borders never did. I've read that Borders made a lot of mistakes that were unique to them, mistakes that B&N didn't make.

As to Microsoft suing B&N, they've also sued other hardware companies over the situation with Android. MS charges that the Android OS infringes on its patents, or at least it does as to how these manufacturers use it on their devices. A couple days ago Google issued a statement of support for B&N. Interestingly, considering the charge, I haven't seen MS file any suits against Google.

[pixichick]

Hilarious!

[CraigInTwinCities]

Yes, a bit of a cowardly move on MS's part... sue the hardware makers over a software issue... rather than the software maker (rival Google) themselves.

I see these suits as corporate harassment and intimidation tactics that won't ever reach trial. They're just looking for money or some other form of out-of-court settlement.

Or it's testing the legal waters for an apocalyptic courtroom clash between MS and Google...

[Bob Mayer]

I remember when there was this indie bookstore on 18th Street in Manhattan that I could take the train and go to.  It was called Barnes & Noble.
Yes, there was a time when there was just one.
I posted on a separate link my suggestion for brick and mortar bookstores:  do what Starbucks is doing. 
Go local and go niche.

[JRTomlin]

I remember when there was this indie bookstore on 18th Street in Manhattan that I could take the train and go to.  It was called Barnes & Noble.
Yes, there was a time when there was just one.
I posted on a separate link my suggestion for brick and mortar bookstores:  do what Starbucks is doing. 
Go local and go niche.

Good advice. It is the local bookstores such as Powell's here in Portland that are likely to thrive.

Admittedly even Powell's laid off but that was more a matter if belt tightening in order to see that they did than losses. People go to Powell's to spend the day and darn few walk out without something or at least having spent money for lunch or a coffee.

[Cheryl Shireman]

Just saw this...

http://www.businessweek.com/news/2011-03-23/barnes-noble-said-to-be-likely-to-end-search-without-buyer.html

[CraigInTwinCities]

Good advice. It is the local bookstores such as Powell's here in Portland that are likely to thrive.

Admittedly even Powell's laid off but that was more a matter if belt tightening in order to see that they did than losses. People go to Powell's to spend the day and darn few walk out without something or at least having spent money for lunch or a coffee.

That's the key to keeping bookstores afloat. Make it a destination stop. Not just books, but food, beverages, events. The "cool place" to be.

BN had an interesting idea with the Nook... come into their brick-and-mortars and you can read any book free without buying it for up to two hours a day.

Not sure if that feature still exists, but I thought at the time, "Smart way to keep brick-and-mortars in the mix of the eBook revolution."

[Sandra Edwards]

I was selling gangbusters, but I've slowed down a bunch.  Still, they owe me a great deal and I would like to get it all...

Same for me.

[Sarah Woodbury]

Wow.  I am really glad that I posted this question . . . and that I have a forum here with other writers who can talk about stuff like this! 

I will not actively worry, then.

[modwitch]

Really? That didn't worry me at all. Companies in financial trouble don't typically start shelling out $$$ before they have to. I thought it was an impressive sign of health.

No shareholder company does that without a vested reason .  My take on it when it happened was that B&N was shopping for a buyer - lots of companies dump liabilities when they do that.  $$ owed to publishers/authors is a liability on the books.  By paying early, they decreased a liability, which made some of the metrics buyers (and possibly stockbrokers) look at more favorable.  "Fancy" accounting.

B&N's ebook business might well come out the other side of a shipwreck, but if there is a bankruptcy involved, it may mean some authors/pubs/distributors don't get paid (ever, or hugely delayed) for sales until the "healthy" ebook business is spun off.  So yeah, if you make lots of $$ there, I'd definitely keep an eye on things.

[William BK.]

The reality is that the book market ball is still currently in the brick-and-mortar side of the court, though it is definitely wafting through the air towards ebooks, who looks set to smash it down the line for a winner. Recent BN employee speaking here....

But BN made the right choice in getting into the ereader market, though they may have done so a little late to remain the dominant force in books for years to come. They won't go the way of Borders, who simply scuttled their own ship, frankly, but they are going to face some very trying times soon as the market reshuffles. They should emerge, but whether they will emerge stronger is the question. I think Amazon already has them beat, in the same way that Apple continues to beat out the competition. It's not always about having the best technology, but very much about timing as well, and BN was a bit slow out of the gates.

(Wow! I just mixed a ton of metaphors there...bad, bad writer!)

[Terrence OBrien]

"What's behind it? I realize that stock price is based on future earnings. Is the market predicting declining revenues for B&N?"

B&N has been trying to sell itself for about a year. The warning was because it doesn't look like anyone is going to buy. That expectation had been a positive pressure on stock price. 

[MarkCoker]

Folks, a concerned Smashwords author tipped me off to this worryfest and suggested I weigh in.

First, some words of reassurance.  B&N has always paid Smashwords on time. Today, at their prompting, I signed paperwork for them to move us to electronic payments so they can pay us even faster. When a partner asks if they can pay you faster, it's not a sign of trouble.  Their business, and our business through them, is doing great. 

When a company puts itself up for sale, it can mean a lot of different things, and not all of them are negative.  When you're publicly traded, you're under tremendous pressure by nervous nelly shareholders and wall street analysts to maximize short term results.  Public companies are often forced to take steps counterproductive to their own long term interests.  I'd argue that B&N has no need to sell out.  Its challenge is to manage the customer migration from brick and mortar to online, and they've been brilliant in this regard.  Sure, B&N has much challenge ahead with brick and mortar and the albatross of store leases on underperforming stores, but this online business they've created is extremely successful, very valuable, and will never become dust in the wind.

In the next week or two, in preparation for our record Q1 author payouts at the end of April, we'll update our authors' Sales & Payments reports with all the latest retailer sales data, including our latest numbers and payments from B&N.  Fret not, you have no reason to worry about getting paid on time through Smashwords.

I recall one Smashwords publisher 12 months ago who demanded we pull all his books from B&N when it was first announced that they were "exploring strategic options."  He feared B&N was in trouble and wouldn't pay for his sales.  12 months later, B&N's business with Smashwords has grown almost 10X and they've always paid on time. Imagine the disservice this publisher perpetrated upon his authors.  They're still not on B&N.

Ebooks are about 10% of the book market now.  In the next 3-5 years, we'll see this percentage grow 5-6X, and B&N will be a primary beneficiary of this shift.

So bottom line, I wouldn't let the latest news discourage you on B&N.   Good luck all.

mark

[Bards and Sages (Julie)]

Folks, a concerned Smashwords author tipped me off to this worryfest and suggested I weigh in.

Mark,

Thanks for jumping in. I'm sure this will calm a lot of ruffled feathers! 

[Selena_Kitt]

Today, at their prompting, I signed paperwork for them to move us to electronic payments so they can pay us even faster.

Yep, we signed e-payment forms with them several weeks ago, so they are (I hope) getting more organized.

But you know me, I still worry. Not enough to pull my books (what was that guy thinking??) but still.

I think Modwitch nailed it tho:

"My take on it when it happened was that B&N was shopping for a buyer - lots of companies dump liabilities when they do that.  $$ owed to publishers/authors is a liability on the books.  By paying early, they decreased a liability, which made some of the metrics buyers (and possibly stockbrokers) look at more favorable.  "Fancy" accounting."

Makes total sense.

But also makes me wonder who's gonna buy them. And if it's going to to turn into the disaster that is the Fictionwise/B&N partnership.

Ch-ch-ch-changes!!

[Terrence OBrien]

"When a company puts itself up for sale, it can mean a lot of different things, and not all of them are negative."

It's usually because they think more value can be realized for stockholders by selling the whole company than by maintaining operation. It can be a great deal for stockholders if it happens.

[RM Prioleau]

That's interesting. I didn't know B&N owned Smashwords. Anyway, I hope B&N will stay afloat. I just wish they will offer more support for the Nook Classic just as they are doing with the Nook Color. I prefer to read my books on an e-ink screen rather than an LCD one.

[MarkCoker]

That's interesting. I didn't know B&N owned Smashwords.

Actually, B&N doesn't own Smashwords.        Smashwords is an independent, privately held ebook publishing and distribution platform.  We distribute books to B&N, Apple, Sony, Kobo, Diesel, and to mobile app platforms like Stanza and Aldiko.

[MikeAngel]

Barnes I worry about. Noble not so much. America is a noble country and will always be. 

[RM Prioleau]

Actually, B&N doesn't own Smashwords.        Smashwords is an independent, privately held ebook publishing and distribution platform.  We distribute books to B&N, Apple, Sony, Kobo, Diesel, and to mobile app platforms like Stanza and Aldiko.

Wow, I apologize. I saw something on a previous post about B&N owning Smashwords. Thank you for clarifying this information!

[Shayne Parkinson]

Mark, thanks for weighing in with such encouraging information.