6 ms·

Microsoft Mulling Nook Media LLC Purchase For $1 Billion

64 points by 9nimo4 13y ago

methodin 13y ago
What does the future hold for E-Ink readers? They are far superior for reading but useless in general. I could see myself getting a Kindle in a few months (I have a first-gen Nook) but after that I don't think they will be relevant as tablets continue to advance.
- phamilton 13y ago
  My guess is that E-ink readers will get cheap enough that everyone will have one. If I remember correctly, we've even had a wink and a nod from Bezos that their intention is to give them away. Get a free E-Ink reader with your Amazon Prime subscription, or something of that sort.
- acabal 13y ago
  I see them as exactly that, dedicated reading devices. Tablets are great for some folks, but others like ereaders because: -E-ink can be stared at for long periods and in bright light; staring at a tablet screen for long periods gives many (including me) eye strain. -Tablets usually include many other apps and internet access, which is a huge distraction when you just want to focus on reading a book. When I'm reading, I prefer to just read. -Good tablets are much more expensive, so people might hesitate to drag them all over the place like they would a paperback. The technology is already pretty cheap to produce, and I imagine big players like Amazon, BN, Kobo, etc. will eventually just sell them for a token few bucks and make up the remainder in walled-garden sales. In the end their usefulness depends on what kind of reader you are. If you read for just 30 minutes a day, then a tablet will probably be fine for you. If you spend hours with a book, a dedicated reader is nice just for the e-ink.
  - dougk16 13y ago
    Much longer effective battery life is also a huge deal for me personally.
  - ajtaylor 13y ago
    For me it's all these things, but most especially the massive difference in battery life. Even on the best tablets you might get around 10 hours of usage. On my old Aztak EZReader Pocket Pro I can easily read 2 Game of Thrones books (~2k pages) on a single charge.
- seanmcdirmid 13y ago
  It all depends on where E-ink technology goes. Can they master color? Can they do better on refresh? I haven't heard anything new lately on how e-ink technology is continuing to advance, so I'm wondering if they've hit some kind of snag where they just aren't advancing fast enough to be very relevant outside of the ebook niche.
  - robryan 13y ago
    Personally I don't think color matters too much, are people on there holding out or choosing a table instead of an eink device because of this? I have a second last generation kindle, the refresh time is fine I think for the primary purpose.
    - seanmcdirmid 13y ago
      The current market where e-ink does well (kindles and other e book readers) I think is too limited to make e-ink very compelling. Tablets are one place where we would love to see e-ink solutions (with color and a bit better refresh). Or consider e-ink wallpaper. The possibilities are many, but the tech needs to break out of its rut before its too late.
- eclipxe 13y ago
  I was on vacation for the last week and along the beach I counted at least 20 Kindle eInk devices. Maybe 2-3 iPads/generic tablets. E-Ink readers can't be beat outdoors and for long form reading.
- sengstrom 13y ago
  Paper books are far superior for reading but useless in general.
transfire 13y ago
I wish I could just use my Kobo E-Ink reader to browse my file server and read files from there. To me that would be the perfect E-Ink reader.
- doneallison 13y ago
  I'm not sure exactly what you have in mind, but a rooted Nook Simple Touch might have the functionality you are describing. See, for example, this Lifehacker post: http://lifehacker.com/5926798/turn-your-rooted-nook-into-the-ultimate-ereader-with-these-10-apps http://lifehacker.com/5926798/turn-your-rooted-nook-into-the...
transfire 13y ago
How does this effect Barnes and Noble?
- eclipxe 13y ago
  They will probably work out something to continuing selling Nook devices in B&M stores. It will be interesting from a content licensing standpoint however. Will Nook/MS still have the same content rights and publisher relationships that B&N has?
- apalmer 13y ago
  I wonder, I remember talk that the Nook was the reason that barnes & noble survived when all the other rick and mortar bookshops went out of business due to Amazon. Not sure if its true or not, wouldnt think the Nook was THAT popular.
  - robryan 13y ago
    Wonder if there physical stores business has rebounded a bit now that most of the competition has been knocked out?
acabal 13y ago
It's too bad this basically means the death of the e-ink Nook. It was really a much better reader than Kindle for a long time, but BN couldn't stay a step ahead and Kindle ended up running circles around them. If Nook had just cleaned up its dictionary, bumped up the resolution on the screen, improved its frontlight (as it was the frontlight "glaze" or whatever washed out the display significantly), and kept polishing the software, they might have stood a better chance. The epub capability is a huge win too. Oh, and they should have chopped off the tablet arm long ago. How a bookseller thought they could compete with the likes of Apple, Samsung, and MS boggles the mind. Edit: Musing out loud here, Nook could also have seen better success by selling a hacker-friendly Nook, maybe for a much higher price. In a world of walled-garden devices, the already-strong hackability of Nook was a huge win for them and, I think, kept them relevant for longer than they would have been otherwise.
- eclipxe 13y ago
  I don't think the market for a hacker-friendly Nook is as big as you think it would be.
  - acabal 13y ago
    Perhaps, but there certainly was (and still is) a not-insignificant amount of people interested in hacking both Nooks and Kindles. Sell a hackable version at a big markup to please the nerds and make some money; regular folks will find them useless or too difficult and stick to the standard offering; meanwhile the nerds will evangelize the hardware for you. I think their big fear is people buying a hackable version and setting it up to be a generic epub reader instead of a walled-garden sales point, thus losing money on the hardware or perhaps support costs for people who messed up their devices. But hacking hardware, even if it just means transferring a .deb and restarting, is utterly beyond the kind of people who would rather just press "buy & download" and forget about it, which of course is 90% of the market anyway. In either case a premium hackable ereader would be an interesting (though perhaps not profitable?) direction for anyone, even an indie company, to pursue.
    - 13y ago
eclipxe 13y ago
Will be interesting to see the direction that Microsoft takes the team. I ran the mobile apps division at BN/Nook for a few years and there are a lot of talented engineers there. It is interesting to see that the focus on hardware is being shifted more to apps on third party devices. I fought many long and hard battles arguing for investment in that direction.
deleted 13y ago
[deleted]
- notatoad 13y ago
  Content licensing. Nook has got a nice big ebook library, and negotiating content deals is hard.
shmerl 13y ago
This must be the money that MS bribed B&N with, after they they realized that their patent litigation against B&N was falling apart, and it could threaten their protection racket against other Android vendors. I guess B&N didn't have guts to reject the bribe and to fight against the troll to the end.
- mtgx 13y ago
  No, that was the $300 million they gave them back then as an "investment" (i.e. settlement). This time they really seem to want to buy it.
- throwawaykf1 13y ago
  Wow, the MS hate really turns people stupid. Here's another way to look at it: Amazon spends many billions and almost a decade creating a real e-book market. Apple spends many billions and almost a decade building the first "modern" tablet, and leverage their tablet dominance to create the first real competitor to Amazon's ebook monopsony. Along the way they fight off an antitrust lawsuit. Google spends billions and many years building specialized scanning infrastructure to scan every dead tree book in existence so they can index them. Along the way they fight off a lawsuit from the Authors Guild. And I'm still not sure if they have significant monetization from that. Microsoft, which has NO ebook story for their struggling mobile ecosystem, swoops in and suddenly becomes a player in the ebook market for 1.3 billion in one year. And people like you, mtgx and rbannfy think this means MS patents were weak. Why don't you think about how much this was really worth to Microsoft and how much they actually paid for it? That might lead you to adjust your views about various aspects of "M$" besides just their patents, but I won't hold my breath.
  - rbanffy 13y ago
    > throwawaykf1 (...) Wow, the MS hate really turns people stupid. And anonymity makes them brave. No. Not really.
    - throwawaykf1 13y ago
      Way to address the points. Ad homs and downvotes are the only recourse you have left, I suppose.
yajoe 13y ago
tl;dr -- meh. Newfound hope for Nook brand. B&N can go private. Microsoft has a shot to win at digital college textbooks. Bearish on rest. For anyone curious about the motivations behind this -- this sale frees up B&N to take its brick and mortar stores private. The CEO Riggio (? -- name escapes me now) has been asking for different private equity groups to buy the nook ("New corp") assets for some time since he thinks the stores are much more profitable. Last quarter results only confirmed as much (Nook did horribly, brick and mortar held their own). The one piece holding up spinning off the brick and mortar business was what to do with new corp and how much of a premium to give back to shareholders. Probably more interesting is how much of the college textbook business Microsoft got in the deal (distribution rights, retail locations, etc.). The textbook business combined with the emergence of new interactive college education is arguably more strategic than the reader. Microsoft could try to compete with iBooks for the next generation of textbooks and thus require people to get Surfaces (or Win8 or whatever) for college classes. We have to wait for the SEC paperwork to see for sure. I have little confidence MS can execute on such a strategy, but it sure looks good on powerpoint. There also is a bit of bravado at play -- Microsoft needs to demonstrate to its partners and their investors it will come rescue them when needed (think Nokia and Dell). The reality is that Amazon won the current generation of e-ink and online e-books. If color were to come to market (still just a prototype), it wouldn't be enough of a game changer. The next form factor to watch for and opportunity for someone to disrupt in e-ink is thin, flexible, and transparent e-ink -- the kind you can roll or fold up. For tablets, Microsoft would likely adopt the Nook brand since it's slightly better known than the Surface, but otherwise they would throw all of the existing tech away. It's too dependent on Android, and Microsoft would prefer to push its own tech. It makes me wonder if Nook's announcement to open up the tablet was the GM's way of doing right by customers should Microsoft make an extreme change (this deal would have been known by the people who approved betting on Google Play for Nook). The content play from this is questionable -- B&N is basically an American brand with most e-book sales growth happening elsewhere. Yes, Microsoft needs content in the US, but tech growth and new customers are elsewhere and this purchase doesn't really help Microsoft that much beyond what they could have gotten from the existing partnership.
mappu 13y ago
> Nook e-readers, meanwhile, do not appear to fall into the discontinuation pile immediately. Rather, they’re projected to have their own gradual, natural decline How is this anything other than Embrace-Extend-Extinguish? And what does microsoft have to gain from paying $1bn for a company (that's running a loss), and then discontinuing their product?
- icebraining 13y ago
  EEE describe embracing standards, extending them with proprietary features and then using those features to drive out the software that implements the actual standard. I don't see how it applies here, even if MS buys the Nook to kill it.

64 points by 9nimo4 13y ago

What does the future hold for E-Ink readers? They are far superior for reading but useless in general. I could see myself getting a Kindle in a few months (I have a first-gen Nook) but after that I don't think they will be relevant as tablets continue to advance.

phamilton 13y ago
My guess is that E-ink readers will get cheap enough that everyone will have one. If I remember correctly, we've even had a wink and a nod from Bezos that their intention is to give them away. Get a free E-Ink reader with your Amazon Prime subscription, or something of that sort.
acabal 13y ago
I see them as exactly that, dedicated reading devices. Tablets are great for some folks, but others like ereaders because: -E-ink can be stared at for long periods and in bright light; staring at a tablet screen for long periods gives many (including me) eye strain. -Tablets usually include many other apps and internet access, which is a huge distraction when you just want to focus on reading a book. When I'm reading, I prefer to just read. -Good tablets are much more expensive, so people might hesitate to drag them all over the place like they would a paperback. The technology is already pretty cheap to produce, and I imagine big players like Amazon, BN, Kobo, etc. will eventually just sell them for a token few bucks and make up the remainder in walled-garden sales. In the end their usefulness depends on what kind of reader you are. If you read for just 30 minutes a day, then a tablet will probably be fine for you. If you spend hours with a book, a dedicated reader is nice just for the e-ink.
- dougk16 13y ago
  Much longer effective battery life is also a huge deal for me personally.
- ajtaylor 13y ago
  For me it's all these things, but most especially the massive difference in battery life. Even on the best tablets you might get around 10 hours of usage. On my old Aztak EZReader Pocket Pro I can easily read 2 Game of Thrones books (~2k pages) on a single charge.
seanmcdirmid 13y ago
It all depends on where E-ink technology goes. Can they master color? Can they do better on refresh? I haven't heard anything new lately on how e-ink technology is continuing to advance, so I'm wondering if they've hit some kind of snag where they just aren't advancing fast enough to be very relevant outside of the ebook niche.
- robryan 13y ago
  Personally I don't think color matters too much, are people on there holding out or choosing a table instead of an eink device because of this? I have a second last generation kindle, the refresh time is fine I think for the primary purpose.
  - seanmcdirmid 13y ago
    The current market where e-ink does well (kindles and other e book readers) I think is too limited to make e-ink very compelling. Tablets are one place where we would love to see e-ink solutions (with color and a bit better refresh). Or consider e-ink wallpaper. The possibilities are many, but the tech needs to break out of its rut before its too late.
eclipxe 13y ago
I was on vacation for the last week and along the beach I counted at least 20 Kindle eInk devices. Maybe 2-3 iPads/generic tablets. E-Ink readers can't be beat outdoors and for long form reading.
sengstrom 13y ago
Paper books are far superior for reading but useless in general.

transfire 13y ago

I wish I could just use my Kobo E-Ink reader to browse my file server and read files from there. To me that would be the perfect E-Ink reader.

doneallison 13y ago
I'm not sure exactly what you have in mind, but a rooted Nook Simple Touch might have the functionality you are describing. See, for example, this Lifehacker post: http://lifehacker.com/5926798/turn-your-rooted-nook-into-the-ultimate-ereader-with-these-10-apps http://lifehacker.com/5926798/turn-your-rooted-nook-into-the...

transfire 13y ago

How does this effect Barnes and Noble?

eclipxe 13y ago
They will probably work out something to continuing selling Nook devices in B&M stores. It will be interesting from a content licensing standpoint however. Will Nook/MS still have the same content rights and publisher relationships that B&N has?
apalmer 13y ago
I wonder, I remember talk that the Nook was the reason that barnes & noble survived when all the other rick and mortar bookshops went out of business due to Amazon. Not sure if its true or not, wouldnt think the Nook was THAT popular.
- robryan 13y ago
  Wonder if there physical stores business has rebounded a bit now that most of the competition has been knocked out?

acabal 13y ago

It's too bad this basically means the death of the e-ink Nook. It was really a much better reader than Kindle for a long time, but BN couldn't stay a step ahead and Kindle ended up running circles around them. If Nook had just cleaned up its dictionary, bumped up the resolution on the screen, improved its frontlight (as it was the frontlight "glaze" or whatever washed out the display significantly), and kept polishing the software, they might have stood a better chance. The epub capability is a huge win too. Oh, and they should have chopped off the tablet arm long ago. How a bookseller thought they could compete with the likes of Apple, Samsung, and MS boggles the mind. Edit: Musing out loud here, Nook could also have seen better success by selling a hacker-friendly Nook, maybe for a much higher price. In a world of walled-garden devices, the already-strong hackability of Nook was a huge win for them and, I think, kept them relevant for longer than they would have been otherwise.

eclipxe 13y ago
I don't think the market for a hacker-friendly Nook is as big as you think it would be.
- acabal 13y ago
  Perhaps, but there certainly was (and still is) a not-insignificant amount of people interested in hacking both Nooks and Kindles. Sell a hackable version at a big markup to please the nerds and make some money; regular folks will find them useless or too difficult and stick to the standard offering; meanwhile the nerds will evangelize the hardware for you. I think their big fear is people buying a hackable version and setting it up to be a generic epub reader instead of a walled-garden sales point, thus losing money on the hardware or perhaps support costs for people who messed up their devices. But hacking hardware, even if it just means transferring a .deb and restarting, is utterly beyond the kind of people who would rather just press "buy & download" and forget about it, which of course is 90% of the market anyway. In either case a premium hackable ereader would be an interesting (though perhaps not profitable?) direction for anyone, even an indie company, to pursue.
  - 13y ago

eclipxe 13y ago

Will be interesting to see the direction that Microsoft takes the team. I ran the mobile apps division at BN/Nook for a few years and there are a lot of talented engineers there. It is interesting to see that the focus on hardware is being shifted more to apps on third party devices. I fought many long and hard battles arguing for investment in that direction.

deleted 13y ago

[deleted]

notatoad 13y ago
Content licensing. Nook has got a nice big ebook library, and negotiating content deals is hard.

shmerl 13y ago

This must be the money that MS bribed B&N with, after they they realized that their patent litigation against B&N was falling apart, and it could threaten their protection racket against other Android vendors. I guess B&N didn't have guts to reject the bribe and to fight against the troll to the end.

mtgx 13y ago
No, that was the $300 million they gave them back then as an "investment" (i.e. settlement). This time they really seem to want to buy it.
throwawaykf1 13y ago
Wow, the MS hate really turns people stupid. Here's another way to look at it: Amazon spends many billions and almost a decade creating a real e-book market. Apple spends many billions and almost a decade building the first "modern" tablet, and leverage their tablet dominance to create the first real competitor to Amazon's ebook monopsony. Along the way they fight off an antitrust lawsuit. Google spends billions and many years building specialized scanning infrastructure to scan every dead tree book in existence so they can index them. Along the way they fight off a lawsuit from the Authors Guild. And I'm still not sure if they have significant monetization from that. Microsoft, which has NO ebook story for their struggling mobile ecosystem, swoops in and suddenly becomes a player in the ebook market for 1.3 billion in one year. And people like you, mtgx and rbannfy think this means MS patents were weak. Why don't you think about how much this was really worth to Microsoft and how much they actually paid for it? That might lead you to adjust your views about various aspects of "M$" besides just their patents, but I won't hold my breath.
- rbanffy 13y ago
  > throwawaykf1 (...) Wow, the MS hate really turns people stupid. And anonymity makes them brave. No. Not really.
  - throwawaykf1 13y ago
    Way to address the points. Ad homs and downvotes are the only recourse you have left, I suppose.

yajoe 13y ago

tl;dr -- meh. Newfound hope for Nook brand. B&N can go private. Microsoft has a shot to win at digital college textbooks. Bearish on rest. For anyone curious about the motivations behind this -- this sale frees up B&N to take its brick and mortar stores private. The CEO Riggio (? -- name escapes me now) has been asking for different private equity groups to buy the nook ("New corp") assets for some time since he thinks the stores are much more profitable. Last quarter results only confirmed as much (Nook did horribly, brick and mortar held their own). The one piece holding up spinning off the brick and mortar business was what to do with new corp and how much of a premium to give back to shareholders. Probably more interesting is how much of the college textbook business Microsoft got in the deal (distribution rights, retail locations, etc.). The textbook business combined with the emergence of new interactive college education is arguably more strategic than the reader. Microsoft could try to compete with iBooks for the next generation of textbooks and thus require people to get Surfaces (or Win8 or whatever) for college classes. We have to wait for the SEC paperwork to see for sure. I have little confidence MS can execute on such a strategy, but it sure looks good on powerpoint. There also is a bit of bravado at play -- Microsoft needs to demonstrate to its partners and their investors it will come rescue them when needed (think Nokia and Dell). The reality is that Amazon won the current generation of e-ink and online e-books. If color were to come to market (still just a prototype), it wouldn't be enough of a game changer. The next form factor to watch for and opportunity for someone to disrupt in e-ink is thin, flexible, and transparent e-ink -- the kind you can roll or fold up. For tablets, Microsoft would likely adopt the Nook brand since it's slightly better known than the Surface, but otherwise they would throw all of the existing tech away. It's too dependent on Android, and Microsoft would prefer to push its own tech. It makes me wonder if Nook's announcement to open up the tablet was the GM's way of doing right by customers should Microsoft make an extreme change (this deal would have been known by the people who approved betting on Google Play for Nook). The content play from this is questionable -- B&N is basically an American brand with most e-book sales growth happening elsewhere. Yes, Microsoft needs content in the US, but tech growth and new customers are elsewhere and this purchase doesn't really help Microsoft that much beyond what they could have gotten from the existing partnership.

mappu 13y ago

> Nook e-readers, meanwhile, do not appear to fall into the discontinuation pile immediately. Rather, they’re projected to have their own gradual, natural decline How is this anything other than Embrace-Extend-Extinguish? And what does microsoft have to gain from paying $1bn for a company (that's running a loss), and then discontinuing their product?

icebraining 13y ago
EEE describe embracing standards, extending them with proprietary features and then using those features to drive out the software that implements the actual standard. I don't see how it applies here, even if MS buys the Nook to kill it.