More than powered by Google?
Yesterday, several outlets reported that Barnes & Noble would consider selling its most promising product -- the Nook e-reader and tablet line. According to the New York Times the rational is:
Barnes & Noble has acknowledged that the Nook has not been profitable, leaving investors anxious about the future costs tied to it, with the need to develop new software and hardware and to advertise the products. By one analyst’s estimate, Barnes & Noble spends $200 million to $250 million annually on its Nook operations.
As I read these articles yesterday, my gut reaction was that Barnes & Noble should suck it up. It seems short-sighted to sell off a vibrant portal to the future for the near-term prospects of physical books, bricks-and-mortar as well as a website that has grown, at least to a degree, because of the product they would sell off. (Full disclosure: I own a Nook Color and think it is a great machine.)
Then I read this paragraph from the Times' article and my thoughts shifted:
Barnes & Noble bookstores prominently feature what the company calls “Nook boutiques” — sleek areas that call to mind Apple stores, with tables to display the Nook devices. And customers are encouraged to use the bookstores as showrooms, browsing for titles and then downloading them on their e-readers.
It hit me that a sell-and-partner strategy with Google could do ridiculously cool things for both companies. This isn't Google's style, I know, but here are five reasons why this could be a good idea:
1) Google has total control over tablet/e-reader hardware. As much as the Android phone market has boomed, the tablet sector for Google's software has struggled. Some of the reason was the software itself, but it seems that marrying it to the right hardware has been equally difficult. Nook is great hardware but there are limitations with it becoming a full-blown tablet ala iPad. If Google, whose OS powers the current Nook, were to enter the hardware sector, why not do it with a machine that has already proven itself? Then it could do what it does best, iterate Nook's OS, without hardware manufacturers getting nervous (ala Google TV).
2) Google suddenly has a massive physical presence. Those Nook boutiques become Google-Nook boutiques, a place that suddenly gives Google presence in 700-plus stores (according to barnesandnobleinc.com) in all 50 states and DC. That is more than twice as many Apple stores without laying one brick.
3) Barnes & Noble has an even more massive online presence. BN.com is no slouch, of course, as it ranks among the 100 largest sites in America (according to Alexa) and has captured 30 percent of the e-book market in two years. But being embedded with Google means playing in Amazon's stratosphere. And through the Nook-Android iterations, just like with Kindle, direct and easy access to all media would expand exponentially, or to put it another way, internationally.
4) Google has the stomach for development. For a retail company like Barnes & Noble, pouring $200 to $250 million into a tech product each year must feel painful. But late last year, Google tossed out $100 million to prospective YouTube channel partners with the hopes they would produce pageviews. While Google is not the industry leader by any means, they clearly see R&D as a billion-dollar venture. Applying a little of that budget to media hardware that is fully integrated with their software makes sense.
5) Google has enhanced human curation/discovery capabilities. Mountain View spends most of its curation energy on past habits of its viewer, which is helpful but obviously limited. We are creatures of habit, but we also like to discover beyond our algorithms. Barnes & Noble, like most good book stores, is packed with expert curators of the media experience. Look at their site's front page and you'll see that actual people are at work. Google is interested in this as well, partnering with independent bookstores and others for their own e-books site. There is great potential in a massive collaboration that customizes a human experience around our digital habits.
The most obvious rebuttal to this proposal can be found on Business Insider which wrote, "Google has no idea how to run a global hardware manufacturing business. (This is not a knock on the folks at Google, and it does not mean the folks at Google are stupid. It just means they don't know how to run a global hardware manufacturing business.)"
This is a far more modest proposal than the Google-Motorola alliance BI was writing about. It is more modest than driverless cars too. But it's a great way for the behemoth digital company to merge onto the physical highway.
