Barnes & Noble looked like it was on its way back to relevancy after a number of quarters of profitability thanks to its Nook tablets. That all ended last year as the company began posting losses, and it looked like its Nook business was starting to come up short against Amazon. Now the company may be breaking apart its various businesses in a bid to save the company.
Leonard Riggio, founder of Barnes & Noble, Chairman of the Board and largest shareholder, announced this morning that he plans to buy the brick and mortar retail business of the book store. There’s nothing set in stone just yet, but it would be the second time in the past few months that an ailing business was bought by its founder. The first, of course, being the acquisition of Dell by its founder Michael Dell for $24.4 billion.
Riggio’s plan is to only buy the company’s retail business. The Nook business was spun off last year so where does this plan leave that? According to a report from The New York Times, the company is looking into winding down its Nook business.
It doesn’t mean that the Nook brand, which was spun off from the retail business last year, will be dead. It only means that Barnes & Noble might stop making its own hardware in favor of licensing its own Nook software to other manufacturers. In essence, we’d see tablets and eReaders from other manufacturers running the Nook software. The company would also presumably focus on its software presence on other platforms like Windows 8, iOS and Android.
If Riggio is successful in his bid to buy the retail operation, it could give Microsoft an opening to purchase the Nook operation. Nook is already closely tied to Windows 8 after Microsoft pumped $300 million into the business last year. Nook is already the best eReader app on Windows 8, and further cultivation at the hands of Microsoft could turn it into a worthy competitor to Apple’s iBooks and Amazon’s Kindle.
All of this is purely speculation for now, and the Barnes & Noble board may not even approve Riggio’s bid to buy the company’s retail operation. Still, it does look like the company will at least be winding down its Nook hardware operations. A focus on its digital business could just be what Nook needs to become profitable again.
[h/t: The Verge]