Why Google should buy Barnes & Noble

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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?

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