18 Comments

Summary:

Many are saying that the Kindle Fire is an example of a company finally getting an Android tablet right. But the Nook was the first tablet that was priced cheaply with a curated approach to content, and that content-first approach could big a big asset to Google.

nook-color-magazines

The release of the Kindle Fire has many pointing to Amazon’s vision for the tablet as a breakthrough. After all, with it’s low price, curated approach to the crowded world of Android apps and a content-first approach, it looks like someone finally got an Android tablet right.

Except that Barnes & Noble kinda got it right before Amazon.  OK, sure, so maybe the Nook Color is technically categorized by B&N as an e-reader, but in reality it was a low-end Android tablet, priced cheaply with a curated approach to content.

But that’s all just a technicality now, because while B&N may have been ahead of Amazon with the Nook Color, the Fire will still blow every other Android tablet out of the water, including the Nook Color and the new Nook tablet, which B&N introduced last week as an answer to the Fire.

So what’s more interesting with the Fire is not where it leaves B&N, which is in a fairly predictable second-place position among high-end e-readers and Android tablets, but where the Fire leaves Google. After all, the Fire is Amazon’s audacious attempt to introduce another tablet upon Google’s platform, while taking away many of the advantages that Google has gained through investing in the Android platform.

What do I mean? Well, sure, technically the Fire is built upon Android, but Amazon’s curated approach will no doubt be more about Amazon than Google, which is best exemplified by the fact that Amazon puts its own browser on the device, displacing Google’s browser. By taking the browser away and giving the consumer a server-assisted browsing experience with Silk, it will be Amazon, not Google, gathering all the data about consumer purchase and social behavior.

So what should Google do? Well, there’s not much they can do, other than continue to push hardware providers like Samsung, HTC and, of course, Motorola and others to utilize a version of Android that has all the Google services that Google was intending for consumers to use with the release of Android.

Nothing to do, except maybe…

Why Google Should Buy Barnes & Noble

Yes, Google should acquire Barnes & Noble. Wait, you ask, didn’t Google just buy Motorola, another hardware company? Of course, but the thing is, B&N isn’t a hardware company. What B&N is is a content retailer.

Like Amazon.

And content is something that Google, as much as it likes to think it is, doesn’t get. At all. The examples are numerous. The failure of Google TV.  Google’s no-show in the music space despite making noise with Google Music. And finally, there’s Google eBookstore, which, from what I can tell, is even more of a non-factor than Google Music.

Why? Because Google, for all its efforts, just hasn’t done well in content sell-through. Compared to Amazon, which is a company with content retailing in its DNA, to say Google is clunky and uncertain in this regard is putting it kindly.  And now, with the Fire, it’s likely that Amazon will show Google — and even possibly Apple — what the dominant online content-retailer can do with its own tablet device.

So how would B&N help Google? First, it would give them a division that understands how to merchandise content, both online and offline.  It would also possibly help them revive their moribund Google eBookstore as well give them an answer to the Kindle business, which is much more than just the hardware line. The Kindle is an entire ecosystem, or book industry in a box, including a growing publishing services. B&N has many of these same offerings, such as its PubIt platform, which Google could simply make its own.

Lastly, Google could also put B&N’s network of physical storefronts to good use.  Sure, Google lives in the cloud almost exclusively, but as Apple has shown, it often pays to have stores where consumers can “touch the company,” and for Google this might be even more important given that it’s hard for a company that is almost all-cloud to build trust as a lifelong content partner. Other benefits, such as encouraging adoption of Google Wallet and selling other Google hardware like the Nexus smartphones, are fairly obvious ones.

A few closing thoughts. Some would argue that buying B&N would mean Google would be competing with its partners, but that concern was put to rest with the Motorola acquisition.  And the cost of B&N would be just a fraction of the Motorola buy, given the book retailer’s sub-$1 billion market cap. Lastly, Kobo’s acquisition by Rakuten for $315 million took maybe the only viable alternative to B&N off the market, and is another reason that Google would be wise to snatch up B&N quickly.

So what are they waiting for?

  1. “It’s” = “it is”

    I can’t believe the level of unprofessionalism in “journalism” today

    Share
    1. No one said I was a journalist. :)

      Share
      1. +10 Michael Wolf for ur comment ^_^

        Share
  2. “Some would argue that buying B&N would mean Google would be competing with its partners, but that concern was put to rest with the Motorola acquisition.”

    If by “put to rest with” you mean “started by” then yes.

    Share
    1. @John – you’re right. Any concerns about Google competing w/customers were ignited when they announced acquisition. They were then promptly put to bed when no major Android partners stopped making phones.

      Share
  3. why should Google buy B&N when- Kindle Fire owner: “I need to google something.. lemme fire up that Silk browser”

    Share
  4. Janine Quatrevingt Tuesday, November 15, 2011

    Great points to ponder. Though, are you sure B&N is in the business of content… or entertainment? Who are B&N customers and why do they go? Either way, still supports your argument, just w a slight twist
    @jquatrevingt

    Share
  5. Not to mention the fact that the offices of BN.com are in Google’s NYC building!

    Share
  6. Nobody should buy B&N, everybody should just let them go out of business. The Nook is not enough reason to keep them around, let alone for Google to buy them and all those stores that come with it. If Google wanted to sell e-books (I thought they already do that), they don’t need to buy a bricks and mortar operation along with it.

    This is the kind of suggestion that I expect from analysts, who need to be ignored by executives.

    Share
    1. Google is selling e-books. Problem is, nobody knows about it. Why? Because they don’t know what they’re doing.

      I don’t think Google needs the brick and mortar business to sell e-books, but there is no doubt B&N’s retail and their massive college network of bookstores would certainly help them seed the market for e-books.

      The B&N college bookstore network alone would help make Google a force in the education market with e-readers, and help them set up the Google eBookstore up as a primary storefront for education e-books.

      Share
      1. I don’t know that B&N is doing a whole lot better than Google at selling e-books; maybe they’re doing hundreds of millions of dollars? That wouldn’t yield meaningful profit to Google, and the margins will only shrink as the industry matures.

        If Google wants to be in the business of selling electronic files (like Amazon is), then it might make sense, but that’s not where their focus lies. If they acquired B&N, they might get some people who are focused on that, but they haven’t demonstrated they are any good at it, either. They’re a mee-too company that copied Amazon too late, and are just the last man standing in the chain book store world. The negative baggage they would bring to Google would far offset any useful value they might bring.

        Share
      2. @KenG – I think most would argue B&N has done a fairly admirable job moving into online commerce, and while they were slower than Amazon to throw their entire weight behind e-books, some would argue Amazon followed them in their Android/tablet strategy.

        I do think Google does want to sell files, or at least content bundles (the e-book market likely will see some creative bundling over time, much like we see w/music). Google has shown an interest is content sales in music, video, and also in e-books. I think their efforts in that regard go beyond “skunkworks” projects.

        And yes, B&N has amassed decent market share, much better than Google. It might only be low hundreds of millions today, but that will grow significantly.

        Share
  7. What the world definitely doesn’t need is Google touching yet another company with their, shall we say, inverse Midas Touch. Such an acquisition would only turn B&N into something not gold but brown…

    It’s an interesting, although obviosly misguided notion. Google shouldn’t really buy B&N. In the imagined scenario in this piece of fantasy, it oughta be Amazon they’re buying to make any sense, given the criteria presented here ;)

    Share
    1. @John – not all Google acquisitions go south. Youtube, Android, Blogger all turned out well. I think Motorola is a much bigger risk and more misguided. Buying B&N is akin to buying Comcast in the video world (owning distribution, where they can make hay), buying Motorola is, in the book world, akin to buying, well, a book printer. Hardware makers don’t make money in the long run; that’s why smart TV makers are all trying to become over-the-top service providers.

      Share
  8. I visited a B&N yesterday: a greeter at the door was surrounded by Nooks and she wasn’t looking happy. She was talking to someone about how frustrated all the employees were at having to sell something that they felt was threatening their business and livelihood. The looks on the faces of these people told me they did’t expect to be employed next year. Now, if Google can come up with a way to save some jobs, good – but otherwise it’s just more greed on Google’s part, should they go after B&N. My town has one bookstore left. I know I can buy online, but there’s something about the social experience of a shop, of handling a book, that machines do not replace. What you describe is the emptiness of capitalism and the end of the usefulness of people: people as mere consumers, no more. It’s the people being left out of all the equations that really disturbs me.

    Share
    1. When buying via the Internet, I don’t have to rub shoulders with a disturbed person who hates greedy people. I am an owner of a successful technology company, you’d give me the creeps.

      Instead of greed, let me throw out another tired but appropriate platitude for you to consider: paradigm shift.

      Those bored employees should be worried about losing their jobs. Just as those bored employees in the mall shoe store should be watching Zappos.com.

      Get real, people need to be thinking about educating themselves and competing in adding value that people are willing to pay more for. Because jobs don’t exist just because “Simon says.”

      Share
  9. At this pace one might suggest that Google buys GE (or perhaps the other way around). Perhaps Google’s acquisition of Motorola mobile assets should be viewed as a predictor of its own fate: break up into distinct business divisions.

    Share
  10. The company that should buy B&N is Sony. Sony puts their products in all the B&N stores creating a very complementary environment. Sony could also use the B&N site to market movies and music along with books. Sony came out with one of the first readers but didn’t have a decent content store.

    Share

Comments have been disabled for this post