End of the Nook? B&N reviews putting itself up for sale

In absolutely shocking news B&N has revealed that it’s thinking about selling itself – It’s rather strange with one group of potential buyers headed by its chairman and founder Leonard Riggio.

First, the Kindle 3 sells out and now B&N’s future disappears – At this rate Amazon will probably die of happiness by the end of the week.

So , what exactly is happening with B&N?

Well, the New York Times reports that B&N is considering selling itself -

… said Tuesday afternoon that its board was considering a sale of the company, possibly to an investor group led by its chairman and founder, Leonard Riggio.

The retailer said its board decided to explore a possible sale and other strategic alternatives because its stock was “significantly undervalued.”

B&N warns us the review might decide selling B&N isn’t the right option. However, the fact that it’s already hired Lazard as its financial advisor and a law firm for legal advice indicates the Board is pretty serious.

Leonard Riggio owns 28% of the company and is a likely takeover candidate. Ronald Burkle has shown considerable Gekko-like interest in B&N in the past and owns 19% of the company. While Leonard Riggio has said he wants to stay with the company ‘through the challenging years ahead’ it’s unlikely he’ll stay if he doesn’t get to buy B&N or if Ronald Burkle wins.  

The stock price increased a lot on this news since, obviously, this is the kind of thing that promises a great future for a company.

What will the impact on Nook be?

If the company that’s making the Nook is being put up for sale it isn’t a very good sign.

Here are the broad possibilities -

  1. Google buys B&N and uses Nook to integrate with Google Editions. It seems an opportunity custom-made for Google.  
  2. Leonard Riggio buys B&N and continues to focus on Nook.  
  3. Ronald Burkle buys it and tries to re-sell it for a profit. He might even carve out the Nook and eBook divisions and sell them to Google or Sony.
  4. An investor group not interested in Nook buys B&N and kills the Nook.

It’s the last possibility that is going to weigh heavily on Nook sales and on the Nook team. The realization that your project might be ended soon couldn’t be very encouraging for the people working on Nook 2 and Nook 3.

If a user is deciding on Kindle vs Nook the last thing she wants to hear is that B&N might sell itself. Doesn’t exactly paint an image of stability and reliability. 

There’s a borderline chance this might all be an elaborate plan to give Leonard Riggio greater control. It’s a rather risky way to go about it.

How does this impact Kindle vs Nook?

You’ve got to be exceptionally brave to put $199 into the Nook if B&N is selling itself.

Kindle 3 is the much better eReader as this Kindle 3 vs Nook post clearly spells out. Add on the fact that the company behind Nook is selling itself and suddenly the decision is a no-brainer.

The Kindle 3 suddenly goes from best eReader to ‘perhaps the only eReader guaranteed to last beyond 2011′. It’ll last a lot longer than that – However, Nook looks in danger of being killed by the new ownership and Sony Reader isn’t doing too well.

Amongst all this joy there’s also a worst case scenario for Amazon.

Will Google buy Nook and turn Kindle vs Nook into a fair fight?

There couldn’t be a more logical fit for the Nook than the open embrace of Google. Google has been cozying up to Sony Reader. However, for just $1 billion or so they can get Nook and combine the #2 and #3 eReaders into a solid threat against Kindle 3 and Amazon.

My money’s on Google buying Nook as soon as they get the chance. They might even buy B&N to ensure they get Nook.

Nook customers are just too valuable. A lot of companies are going to want to buy B&N to be able to get access to Nook and Nook owners.

Kindle 3 is either going to have zero competition or deadly competition

It’s such extreme possibilities -

  1. If Google gets its hands on Nook we suddenly get a decent eReader with the scary Google Editions store.  
  2. If Amazon somehow manages to buy B&N or its Nook division it can pretty much end the eReader Wars. 
  3. If another investor buys B&N it’s pretty likely Nook will flounder or die out.
  4. If it goes back to Leonard Riggio he’ll probably continue to fight the good fight.

The Kindle 3 will in 6 months either see Nook playing on the same team or Nook will have disappeared or it will remain Kindle 3’s biggest enemy.

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