July 28, 2021

Barnes & Noble, Taking On Amazon in the Fight of Its Life

IN March 2009, an eternity ago in Silicon Valley, a small team of engineers here was in a big hurry to rethink the future of books. Not the paper-and-ink books that have been around since the days of Gutenberg, the ones that the doomsayers proclaim — with glee or dread — will go the way of vinyl records.

No, the engineers were instead fixated on the forces that are upending the way books are published, sold, bought and read: e-books and e-readers. Working in secret, behind an unmarked door in a former bread bakery, they rushed to build a device that might capture the imagination of readers and maybe even save the book industry.

They had six months to do it.

Running this sprint was, of all companies, Barnes Noble, the giant that helped put so many independent booksellers out of business and that now finds itself locked in the fight of its life. What its engineers dreamed up was the Nook, a relative e-reader latecomer that has nonetheless become the great e-hope of Barnes Noble and, in fact, of many in the book business.

Several iterations later, the Nook and, by extension, Barnes Noble, at times seem the only things standing between traditional book publishers and oblivion.

Inside the great publishing houses — grand names like Macmillan, Penguin and Random House — there is a sense of unease about the long-term fate of Barnes Noble, the last major bookstore chain standing. First, the megastores squeezed out the small players. (Think of Tom Hanks’s Fox Sons Books to Meg Ryan’s Shop Around the Corner in the 1998 comedy, “You’ve Got Mail”.) Then the chains themselves were gobbled up or driven under, as consumers turned to the Web. B. Dalton Bookseller and Crown Books are long gone. Borders collapsed last year.

No one expects Barnes Noble to disappear overnight. The worry is that it might slowly wither as more readers embrace e-books. What if all those store shelves vanished, and Barnes Noble became little more than a cafe and a digital connection point? Such fears came to the fore in early January, when the company projected that it would lose even more money this year than Wall Street had expected. Its share price promptly tumbled 17 percent that day.

Lurking behind all of this is Amazon.com, the dominant force in books online and the company that sets teeth on edge in publishing. From their perches in Midtown Manhattan, many publishing executives, editors and publicists view Amazon as the enemy — an adversary that, if unchecked, could threaten their industry and their livelihoods.

Like many struggling businesses, book publishers are cutting costs and trimming work forces. Yes, electronic books are booming, sometimes profitably, but not many publishers want e-books to dominate print books. Amazon’s chief executive, Jeffrey P. Bezos, wants to cut out the middleman — that is, traditional publishers — by publishing e-books directly.

Which is why Barnes Noble, once viewed as the brutal capitalist of the book trade, now seems so crucial to that industry’s future. Sure, you can buy bestsellers at Walmart and potboilers at the supermarket. But in many locales, Barnes Noble is the only retailer offering a wide selection of books. If something were to happen to Barnes Noble, if it were merely to scale back its ambitions, Amazon could become even more powerful and — well, the very thought makes publishers queasy.

“It would be like ‘The Road,’ ” one publishing executive in New York said, half-jokingly, referring to the Cormac McCarthy novel. “The post-apocalyptic world of publishing, with publishers pushing shopping carts down Broadway.”

Shouldering the responsibilities of Barnes Noble is one thing. Holding the fate of American book publishing in your hands is quite another. But William J. Lynch Jr., the C.E.O. of the company, says he is up for the battle. With all of three years of experience in bookselling, Mr. Lynch must pull off a balancing act that would be tricky even in good times. He must carve out a digital future for Barnes Noble without forsaking its hard-copy past, all while his company’s profit and share price are under pressure, his customers are fleeing to the Web and Amazon is circling.

It might come as a surprise, but Mr. Lynch says Barnes Noble is, in fact, a technology company. Never mind that it has 703 bookstores and operates in all 50 states. To the delight of publishers, he has pushed hard into e-books and, with the help of the well-reviewed Nook, even grabbed a lot of market share from Amazon. But he is playing David to Mr. Bezos’s Goliath. Barnes Noble’s stock closed on Friday at $11.95, putting the value of the company at $719 million. Amazon’s shares closed at $195.37, valuing Mr. Bezos’s company at $88 billion.

Article source: http://www.nytimes.com/2012/01/29/business/barnes-noble-taking-on-amazon-in-the-fight-of-its-life.html?partner=rss&emc=rss

Speak Your Mind