Barnes & Noble Shows Bertelsmann the Money

Discussion
Jul 30, 2003
George Anderson

By George Anderson


Reuters reports Barnes & Noble has agreed to pay $164 million to acquire Bertelsmann AG’s share of barnesandnoble.com.


Bertelsmann sells its stake at a time when the dot-com venture appears to be on the verge of turning a profit. According to the company it will “produce positive cash flow in the fourth quarter, as well as for 2004.”


Despite strong competition from Amazon and others, barnesandnoble.com has been improving bottom line results through cost-cutting measures.


Moderator’s Comment: Does Bertelsmann’s timing for
selling its stake in barnesandnoble.com strike you as being odd? Is there room
on the Internet for another major books, music and movies retailer other than
Amazon?


The winner of the attributed statement of the week that
left us asking, “Yeah, so?” goes to Prudential analyst Mark Rowen.


According to Reuters, Mr. Rowen expressed concern about
barnesandnoble.com losing market share to Amazon.com in a research note. He
wrote, “It appears to us that barnesandnoble.com’s focus on reaching profitability
may have caused it to lose momentum to its archrival,” Given the option of gaining
share while losing money or being profitable with a smaller market share, we’ll
take the latter.
[George
Anderson – Moderator
]

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