DailyFinance.comhttp://www.dailyfinance.comDailyFinance.comhttp://o.aolcdn.com/os/df/2013/img/2-dailyfinance_logo_m.pngDailyFinance.comhttp://www.dailyfinance.comen-usCopyright 2013 Weblogs, Inc. The contents of this feed are available for non-commercial use only.Blogsmith http://www.blogsmith.com/As Borders Moves to the Brink, Barnes & Noble Has a Happy Holidayhttp://www.dailyfinance.com/2011/01/06/as-borders-moves-to-the-brink-barnes-and-noble-has-best-holiday-s/http://www.dailyfinance.com/2011/01/06/as-borders-moves-to-the-brink-barnes-and-noble-has-best-holiday-s/http://www.dailyfinance.com/2011/01/06/as-borders-moves-to-the-brink-barnes-and-noble-has-best-holiday-s/#commentsFiled under: , , , , , ,

The first week of 2011 has amply demonstrated the great chasm between the two largest book retailers in the country. While Borders (BGP) inches ever closer to the brink of bankruptcy as a result of its inability to pay key vendors -- such as the publishers who supply books -- Barnes & Noble (BKS) basks in the glow of its best holiday season in over a decade.

For the nine-week holiday period ending Jan. 1, comparable store sales for Barnes & Noble's brick-and-mortar business was up 9.7% compared to last year's holiday season. For the month of December alone, comp store sales rose 12.8% compared to a year ago.

What really caused B&N to cheer so loudly, however, was the online side, which has grown significantly over the course of the last 12 months. Comparable sales for BN.com increased 78% compared to last year's holiday-selling season, while total sales for the online side grew to $228.5 million, an increase of 67% as compared to the $134 million the division earned during the same period a year ago.

B&N Gives Thanks to a Four-Letter Word

As CEO William Lynch said in the accompanying statement, B&N owes its big holiday success story to a four-letter word: NOOK, its e-reader brand. More specifically, the NOOKColor, which the company introduced last fall just before the holiday season got underway, has proven to be a huge hit. "NOOKcolor was one of the most sought-after gifts this holiday season and has quickly become the best-selling device at Barnes & Noble," said Lynch. "And, even more encouraging to us, NOOK's popularity is helping to drive new sales at both our stores and online, where 60% of NOOKcolor owners are new customers of our Barnes & Noble digital bookstore."

Aside from its e-readers, B&N also attributed the big gains to better-than-expected sales for physical books, especially hardcovers, and a 48% sales increase for its Toys & Games department.

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After a turbulent year that included a proxy fight from Ron Burkle, the company put up for sale, and rumors swirling about the possibility of going private, Barnes & Noble needed some good news to begin 2011. With Thursday's holiday earnings report, investors should be reassured the company's digital-heavy strategy appears to be working, and that B&N is scarfing up significant market share that might otherwise go to online e-book competitors Amazon (AMZN), Google (GOOG) and Apple (AAPL).

The news also justifies Credit Suisse's upgrading of B&N stock from underperform to neutral, even if the primary reason for that upgrade has more to do with B&N benefiting the most from a potential Borders bankruptcy. As analyst Gary Balter said in his accompanying note, Barnes & Noble "would take about 18% of Borders sales, bringing in an additional $400 million, if the rival chain were to close all of its stores." Never has the chasm between book retailers been as vast as it is now, and with news of Borders likely to remain dire for the foreseeable future, that chasm will only grow deeper.



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]]>Barnes and NobleBarnes and Noble earningsBarnes and Noble holiday reportBKS earningsBKS holiday earningsbooksellersbooksellingbookstoresBorderse-bookse-readersholiday earningsNookNookColorSarah WeinmanThu, 06 Jan 2011 11:00:00 ESTBorders: Getting Closer to the Bookseller's Final Chapterhttp://www.dailyfinance.com/2011/01/02/borders-getting-closer-to-the-booksellers-final-chapter/http://www.dailyfinance.com/2011/01/02/borders-getting-closer-to-the-booksellers-final-chapter/http://www.dailyfinance.com/2011/01/02/borders-getting-closer-to-the-booksellers-final-chapter/#commentsFiled under: , , ,

Borders bookstoreBorders (BGP), the country's second-largest book retailer, had been counting on a Christmas miracle to rescue it from deep financial doldrums. But the holiday season played Scrooge instead. Now, the liquidity shortfall Borders warned might happen -- and a possible bankruptcy it didn't need to warn worried investors about -- seems ever more certain in 2011.

As first reported on Dec. 30 by industry newsletter Publishers Lunch, Borders has been telling some of its key vendors -- including some of the largest publishing houses -- that it's delaying year-end 2010 payments for inventory. One of those houses is Hachette Book Group (LGDDY), whose CEO David Young told the The Wall Street Journal that Borders has indeed delayed its most recent payment to the publisher, adding that Hachette "will decide shortly whether to continue shipping new books to Borders."

That decision will only come after Hachette, as well as other publishers, meet with Borders executives. But one unnamed major publishing house has already made the call to stop shipping books, according to Publishers Weekly.

No Surprise

In a statement, Borders spokesperson Mary Davis indicated the payment delay was a function of already-disclosed plans for securing fresh credit refinancing, something the company desperately needs. "Borders has determined that it is necessary to restructure its vendor financing arrangements and is delaying payments to certain of its vendors. Borders has notified these vendors and will be working with them to restructure their arrangements with the company."

The news itself isn't surprising, since Borders itself made clear how much trouble it was in earlier this month with its most recent quarterly report: a $74 million net operating loss, steep drops in comparable-store sales and the stated need to quickly shore up liquidity lest it violate credit agreements, a statement it on Dec. 30.

There's no getting around that these corporate communications are the most ominous yet that have come from Borders' headquarters. Considering it has consistently lost money every quarter for the last three years and relied on both Pershing Square Capital CEO William Ackman and company CEO Bennett LeBow for 11th-hour cash infusions, the news of vendor payment delays can't possibly inspire confidence among investors. To wit, Borders stock dropped Friday from $1.16 to just 96 cents -- a value that, if it sticks, would get the company delisted from the New York Stock Exchange.

Failed Strategies

What, then, of that fourth quarter, when holiday sales were supposed to bolster Borders' fortunes? The retailer will delay reporting the official results as late as possible, as it did with the third quarter.

But clearly, the strategies Borders employed simply didn't work: It tried selling e-readers that have nowhere near the market share of Amazon's (AMZN) Kindle and Barnes & Noble's (BKS) Nook; its redesigned website crashed at the busiest holiday times; and it made a strong push to get Borders' customers to sign up for Rewards cards offering steep discounts to give the illusion of brisk sales. All these moves ultimately proved only to push Borders to the brink.

As a result, its traditional end-of-year push to return unsold inventory on a mass scale to publishers for full credit won't happen this time around. Instead, Borders has reversed course, directing employees to postpone returning volumes of books that aren't selling and that take up valuable shelf space. Chatter on Borders employee message boards indicate the official reason is to maintain inventory levels and not to waste money.

The directive's timing, however, naturally led to another, more obvious conclusion: With publishers saying no, Borders needs to keep what inventory it has to keep shoppers coming in -- and to convince its lenders and potential investors to keep pumping cash into the troubled retailer.

A No-Win Situation

The publishing industry, however, finds itself in a tough spot. Do publishers continue to supply books to Borders, knowing the company, as it stands now, won't be able to turn itself around, let alone turn a profit? Or do they go along with the house that's already refusing to supply stock to Borders and watch it go into bankruptcy, either the preferred Chapter 11 or the more dire Chapter 7?

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Choosing the former means delaying the inevitable. But forcing the dissolution of Borders means a sizable chunk of the trade book business, somewhere around 10% of overall market, will vanish overnight. And that will affect publishers' bottom lines and force them to make decisions they may not have wanted to, or would regret, in order to keep their own balance sheets as close to the black as possible.

Even if Borders conjures up another rabbit from the same overextended hat and convinces some new investor to sign on, the clock is ticking fast. When it reaches zero, a new phase in the publishing world begins, for good or for ill.

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]]>Bennett LeBowbookstoresBordersBorders bankruptcycash crunche-booksliquidity shortfallMike Edwardspublishingvendor paymentsSarah WeinmanSun, 02 Jan 2011 16:00:00 ESTAmazon Patents System for Returning Unwanted Giftshttp://www.dailyfinance.com/2010/12/27/amazon-patents-system-for-returning-unwanted-gifts/http://www.dailyfinance.com/2010/12/27/amazon-patents-system-for-returning-unwanted-gifts/http://www.dailyfinance.com/2010/12/27/amazon-patents-system-for-returning-unwanted-gifts/#commentsFiled under: , , , , ,

While it may sound more Scrooge than Santa Claus, Amazon (AMZN), the world's largest online retailer, has filed a patent for technology that would allow customers to return -- or "convert" -- gifts they don't like, even before they actually arrive, according to the Washington Post.

Amazon's patent, which is jointly attributed to CEO Jeff Bezos, includes among other services a way to automatically return presents from particular friends or family members who consistently send bad gifts. For example, the patent says you could "convert all gifts from Aunt Mildred." In this instance, "the user may specify such a rule because the user believes that this potential sender has different tastes than the user."

And whether the gift recipient implements this exchange regularly, or just once, the gift giver should never know the exchange happened: "The user may also be provided with the option of sending a thank you note for the original gift," according to the patent, "even though the original gift is converted."

"Misses the Spirit of Giving"

Amazon's rationale, as outlined in the patent filing, is that "the gift-giving experience through network shopping services would be improved for both senders and recipients if enhanced systems and methods were provided for converting gifts." There are also onerous and expensive shipping costs to contend with when up to 30% of all gifts are exchanged in some form or another.

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But some are miffed at the philosophy behind computerized gift-exchanging. "This idea totally misses the spirit of gift giving," Anna Post, great-great-granddaughter of etiquette doyenne Emily Post, said to the Post. "The point of gift giving is to allow someone else to go through that action of buying something for us. Otherwise, giving a gift just becomes another one of the world's transactions."

For now, etiquette minders and potentially hurt family members can take a deep breath. Amazon has set no timetable for moving this idea from patent to reality, and even if it happens, the likelihood that millions of unhappy gift recipients will jump on board to "convert" their presents to the gadgets, clothes and toys they really want seems to be fairly small indeed.


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]]>Amazongiftsholiday shoppingJeff Bezospatentundesirable giftsunwanted giftsSarah WeinmanMon, 27 Dec 2010 12:30:00 ESTE-Readers Make Great Gifts -- but Which One?http://www.dailyfinance.com/2010/12/21/e-reader-gift-guide/http://www.dailyfinance.com/2010/12/21/e-reader-gift-guide/http://www.dailyfinance.com/2010/12/21/e-reader-gift-guide/#commentsFiled under: , , , , , , , , , , , , ,

Kindle offer on Amazon websiteMake no mistake: After years of false starts and big hopes, e-reading has finally begun to reach the masses. Digital books now account for nearly 10% of total trade book sales, and stand-alone e-reading devices can be had for lower prices than ever before. Apple's (AAPL) introduction of the iPad earlier this year opened the market even further, allowing customers to casually read e-books on the same device they use for playing games, watching movies and surfing the Web.

And in these precious few days left in the 2010 holiday shopping season, e-readers make for an easy gift for a wide range of family and friends. So with that in mind, DailyFinance has assembled a guide to the major e-readers and what each one is best suited for as well as what issues you should consider before buying.



KINDLE (AMZN)
$139 for the WiFi version; $189 for the 3G model

Where to buy: Through Amazon's Kindle Store, of course. But the Kindle is now stocked at Best Buy (BBY) Walmart (WMT), Staples (STP) and Target (TGT).

Best suited for: Extended reading. The Kindle, now in its third generation, uses an upgraded e-Ink screen that's easy on the eyes, especially in direct sunlight. It doesn't have to be recharged very much -- every week when WiFi is turned on, or every two to three weeks when it's off. And at less than a pound, it's the lightest of the e-readers, making it easy to hold for long stretches of reading.

Issues: The very screen that works in sunlight works less well when the light is dim or off entirely. The selection of books available for the Kindle keeps growing (now over 700,000), but the proprietary format means Kindle books can be read only on certain devices (iPhone, iPad, PCs and Macs) with Amazon's software, and not at all on competing devices like the Nook.


NOOK (BKS)
$149 (WiFi); $199 (3G)

Where to buy: Barnes & Noble stores and BN.com. It's also stocked at Walmart, Best Buy and, through a new partnership, Books-A-Million (BAMM), the third-largest bookstore in the country.

Best suited for: Extended reading, just like the Kindle. Lets users lend selected books to others, for a two-week period.

Issues: A book loaned to someone else is off-limits for that time period. At over a pound, the Nook is significantly heavier than the Kindle. Otherwise, not much distinguishes the black and white Nooks from the Kindle. The color Nook, however, is clearly a step up -- and is only $50 more.


NOOK COLOR
$249

Where to buy: Same places as the black-and-white Nooks.

Best suited for: Books and magazines in color. The backlit screen is rich in color hues, which makes reading illustrated books (especially for children) and glossy magazines particularly pleasurable. And at half the iPad's price, it's a good compromise for the budget-conscious.

Issues: At eight hours, battery life is a lot lower than the Nook Color's black-and-white counterparts or the Kindle. An Nook app store is available, but it's not very well populated, and the games and apps aren't as well developed as those available for the iPhone or iPad. And the Nook Color's seven-inch screen isn't as well-suited for magazine reading as the iPad.


iPAD
$499-$699 (WiFi only); $629-$829 (3G)

Where to buy: Apple Store, Best Buy and Target.

Best suited for: The iPad is a multimedia device that's ideal for games, movies and other consumptive content, so it's great for book readers to get something extra. That means illustrated books, book-related apps, enhanced e-books and other interchangeable terms that describe books that offer a little more. All the major e-book devices supply apps for the iPad, so customers can easily read their Kindle or Nook e-books.

Issues: Backlighting is a particular problem for those with sensitive eyes who want to read in the sunlight (i.e., it's impossible). Battery life is about as long as the Nook Color, and far shorter than for the e-Ink devices. Buying e-books directly from the iBookstore, which stocks a fraction of what's available via the Kindle or the Nook, is a nonstarter (with sales to prove it). And with rumors swirling that a new version of iPad, outfitted with cameras, may be on the market in April, it might make sense to wait for it. Plus, it's likely to be priced lower.


SONY READER
$179 for the five-inch Pocket Edition (no WiFi); $229 for the six-inch Touch Edition (no WiFi); $299 for the seven-inch Daily Edition (WiFi only)

Where to buy: Sony Stores, Borders and Best Buy.

Best suited for: Extended reading, thanks to updated e-Ink screens. And it's good for reading e-books of all stripes, thanks to less onerous digital rights management (DRM) than that used for the Kindle or Nook.

Issues: Sony was an early innovator, which started producing e-readers in 2006. But it has fallen out of favor in the American market. The $299 price tag for a WiFi-only model is prohibitively more expensive than the Kindle or the Nook, and more expensive than the 3G-enabled Nook Color. Only last month did Sony announce the impending arrival od reading apps for the iPad and iPhone, which appear to be too little, too late - since they didn't make it for the holiday season.


KOBO
$149 (WiFi only)

Where to buy: Borders (BGP) stores and online.

Best suited for: Extended reading, akin to Nook and Kindle. A new social reading application has been added to beef up the device's innate capabilities.

Issues: Borders, which has a minority stake in the Canadian-based company, is on such shaky ground that it will need additional financing to stay liquid in 2011. While Kobo e-books can be read on the iPad and its smaller cousins, the lack of 3G or color capability essentially makes this a nonstarter in the American market -- especially if Borders' own future remains in peril.


GOOGLE eBOOKS
Price: Not Applicable

Where to buy: Google has no plans for a standalone device, though one can read Google eBooks on the Web or download an app for the iPad/iPhone/iPod Touch. Aside from Google's website, its e-books are available from your local independent bookstore, thanks to a partnership with the American Booksellers Association.

Best suited for: People who don't want to be tied to a single device.

Issues: Google eBook pricing is still variable. A book priced one way directly through Google may be significantly higher on an independent bookstore's website.


SAMSUNG GALAXY TAB
Price: $399 with a Verizon (VZ) two-year contract; $599-$649 contract-free

Where to buy: Verizon stores; Best Buy

Best suited for: Games and magazines, but compared to the iPad, those features don't quite measure up.

Issues: E-reading devices are available because the Galaxy Tab operates on an Android system, for which both Amazon and B&N supply apps. But the seven-inch screen is less suited for reading than stand-alone e-readers or the nearly 10-inch iPad. The contract-free version is pricey compared to the iPad, and the hassle of a two-year-contract makes the lower price less worthwhile.

This article has been amended since its original publication to correct changes about the availability of Sony apps for mobile devices.

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]]>bookse-readersgalaxy tabgift guidegoogle ebooksholiday shoppingholidaysipad appiPhoneipod touch 3gKindlekobonooknook colorNookColorpublishingSamsungsony readersony reader daily editiontabletSarah WeinmanTue, 21 Dec 2010 07:00:00 ESTWikiLeaks Founder Julian Assange to Write His Memoirshttp://www.dailyfinance.com/2010/12/20/wikileaks-founder-julian-assange-to-write-his-memoirs/http://www.dailyfinance.com/2010/12/20/wikileaks-founder-julian-assange-to-write-his-memoirs/http://www.dailyfinance.com/2010/12/20/wikileaks-founder-julian-assange-to-write-his-memoirs/#commentsFiled under: , ,

Julian Assange, Wikileaks founderWikiLeaks founder Julian Assange cleared one legal hurdle last week when he was granted bail in the U.K. over sexual assault charges filed in Sweden. And as the embattled 39-year-old Australian hacker's lawyers fight his extradition, he'll be working on a memoir. The book will be published in the U.S. by Knopf, a division of Random House, and in the U.K. by Edinburgh-based Canongate.

Canongate publisher Jamie Byng confirmed the news to DailyFinance by email, adding that the U.K. publisher was handling all translation rights. (A spokesperson for Knopf was on vacation and didn't return request for comment.) Caroline Michel of the U.K.-based literary agency Fraser, Peters & Dunlop brokered the English-language book deals, and both publishers expect Assange to deliver a finished manuscript by March, with plans to publish later in 2011.

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Interest in Assange is at fever pitch since WikiLeaks began disseminating more than 250,000 diplomatic cables in late November. Companies such as Visa (V), Amazon (AMZN) and PayPal have cut off the organization's ability to collect donations and existing funds, and Time magazine passed over Assange for Person of the Year, giving Facebook CEO Mark Zuckerberg the honor. As a result, a memoir from Assange is a logical step, since the book will have great interest for his many admirers -- and just as many detractors.

Interestingly, news of Assange's memoir first came through in Spanish, when Claudio Lopez, head of the literary division for Random House's Spanish-language division Mondadori, posted a message on Twitter Monday afternoon. That's even more ironic since rights to the memoir haven't sold yet in Spain, though that will almost certainly change -- as it likely will in other countries around the world.

Speaking of irony, what are the chances the book gets leaked before it's published?

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]]>book dealbooksCanongateJamie ByngJulian AssangeJulian Assange memoirKnopfmemoirpublishingRandom HouseWikileaksSarah WeinmanMon, 20 Dec 2010 16:50:00 ESTOlympic Swimmer Amanda Beard's New Sport: Authorhttp://www.dailyfinance.com/2010/12/18/olympic-swimmer-amanda-beards-memoir-pegged-to-2012-summer-game/http://www.dailyfinance.com/2010/12/18/olympic-swimmer-amanda-beards-memoir-pegged-to-2012-summer-game/http://www.dailyfinance.com/2010/12/18/olympic-swimmer-amanda-beards-memoir-pegged-to-2012-summer-game/#commentsFiled under: , ,

Amanda Beard may only be 29 years old, but she's been in the hearts and minds of Olympics-obsessed Americans ever since she took home three medals -- including a gold -- from the 1996 Atlanta Summer Games as a teddy-bear-clutching 14-year-old. Since then, Beard has juggled Olympic triumphs with more tabloid-worthy actions, such as posing for Playboy in 2007 and being a spokeswoman for PETA the following year.

But with the 2012 Olympics in sight, Beard is set to add a new accomplishment to her crowded list: being an author.

According to CBS News, Beard's upcoming memoir, In the Water They Can't See You Cry, will detail her life as an Olympic medalist several times over, as well as share stories away from the pool and her "harrowing journey" through drugs, alcohol and eating disorders. The book, which will be co-written by Beard's manager Evan Morgenstein, will be published by Touchstone, an imprint of Simon & Schuster (CBS).

One Badly Time Injury Could Spoil It All

As for the timing, at first blush it seems like a no-brainer to bring out the book in April 2012, just as Beard hopes to be preparing for the 2012 Games. But publishing's tortoise-like scheduling may be a thorn in Beard's side, accustomed as she is to a world where milliseconds make all the difference between being an Olympian and watching from TV at home.

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By 2012, Beard will be 31 years old. That's a decade-and-a-half younger than the age multi-Olympian (and 2008 Games' top comeback story) Dara Torres will be, and only a year older than fellow competitor and Olympic gold medalist Natalie Coughlin, who's also making a bid to qualify for the 2012 Games.

All it takes, however, is one injury at the wrong time or the arrival of a new face out of nowhere to derail long-in-the-making expectations, and Beard's results so far this year, when she came out of retirement with an eye toward the London Summer Games, have been lackluster: At the National Championships in August, she qualified for finals in both the 100 breaststroke and 200 breaststroke -- events for which she'd previously won several world and Olympic medals -- but failed to medal, finishing fifth both times. Coughlin, by comparison, finished first and third in two events.

Whether or not Beard succeeds in her newest bid to be an Olympian, she certainly has a story to tell. And Beard and her publisher are banking on that story reaching not just Olympic Games watchers, but a broader and wider audience, as well.

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]]>2012 OlympicsAmanda BeardmemoirsMichael Phelpsolympic gamesolympic medalistSimon SchusterswimmingTouchstoneSarah WeinmanSat, 18 Dec 2010 09:00:00 ESTThe Bleeding Continues: Another Quarter of Dismal Earnings for Bordershttp://www.dailyfinance.com/2010/12/09/the-bleeding-continues-another-quarter-of-dismal-earnings-for-b/http://www.dailyfinance.com/2010/12/09/the-bleeding-continues-another-quarter-of-dismal-earnings-for-b/http://www.dailyfinance.com/2010/12/09/the-bleeding-continues-another-quarter-of-dismal-earnings-for-b/#commentsFiled under: , , , , , ,

Borders nearly doubled its operational loss in the third quarter, continuing a streak of dismal earnings for the country's second-largest bookstore.Borders (BGP), the country's second-largest book retailer, posted dismal third-quarter earnings Wednesday. The company's loss from continuing operations nearly doubled to $74.4 million, or $1.03 per share, from $37.7 million, or 63 cents per share, in the same quarter a year ago.

Sales totaled $470.9 million, shrinking 17.6% from the third quarter of 2009 -- a quarter that already had seen a 12.7% drop from the same period in 2008 -- and 10.5% from second-quarter sales of $526 million this year. Borders attributes the steep sales declines to the closure of 204 bookstores in the last year, including 191 smaller Waldenbooks stores. And while those closures surely played a role, the third-quarter decline was steeper than that of the last two quarters, which also had been affected by closures.

The primary culprit was the gross margin from the stores that remained open: It plunged from 18.5% to 15.4%. Borders blamed "the de-leveraging of fixed occupancy costs caused by negative comparable store sales." In other words, stores' sales shrunk, while their fixed costs -- things like rent, insurance and electricity -- remained the same.

Sliding Sales

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Comparable store sales slid by 12.6%, mainly from declines in adult fiction and narrative nonfiction. Even more troubling is the performance from Borders.com, which saw an 8.6% year-over-year sales decline to $12.5 million for the quarter, even though year-to-date sales are up 24% to $43.3 million.

Borders' shrinking payroll costs (due to store closures and multiple rounds of layoffs) couldn't compensate for its increased losses. Costs from the company's digital expansion and investment in the so-called "Area E" digital shops in brick-and-mortar stores added to the carnage.

Still, its digital business -- as well as its toys and games business -- brought a thin silver lining to the weak earnings report. Digital sales doubled over last year, while comparable toys and games sales grew 6.6% from the year-ago quarter. Borders stocks many more e-readers than it did a year ago, when only the Sony (SNE) reader models were available, and also beefed up its toy and game offerings in the last year.

Financing Woes

The most telling piece of news, however, is what Borders says about its future. A third party valuation "lowered the estimated liquidation value of our inventory," reducing its ability to borrow money.

While the company is looking hard for replacement financing, it ominously warns that "there can be no assurance that we will be able to obtain adequate financing or that our other initiatives will be successful. If the steps that we are taking are not successful, we could be in violation of the terms of our credit agreements in the first quarter of calendar 2011, which could result in a liquidity shortfall."

CEO Mike Edwards says Borders' "commitment to winning at retail is stronger than ever" and the company will "move into a new phase of the brand transformation process." But those words may not end up meaning a whole lot unless the company gets additional financing and unless its repeated attempts to attract customers with multiple rewards initiatives, more and more nonbook merchandise and a redesigned website -- one that now tends to crash at the worst possible moments -- somehow pays off.

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]]>Barnes and NobleBennett LeBowbooksbooksellersbooksellingbookstorebookstoresborderlandsBordersborders booksBorders earningsBorders earnings reportsBorders GroupBorders quarterly reportsBordersBookse-booksearningsearnings reportEarnings reportsMike EdwardspublishingSarah WeinmanThu, 09 Dec 2010 22:00:00 ESTBarnes & Noble Stakeholder Aletheia Embroiled in Litigation, SEC Investigationhttp://www.dailyfinance.com/2010/12/08/barnes-and-noble-stakeholder-aletheia-embroiled-in-litigation-sec/http://www.dailyfinance.com/2010/12/08/barnes-and-noble-stakeholder-aletheia-embroiled-in-litigation-sec/http://www.dailyfinance.com/2010/12/08/barnes-and-noble-stakeholder-aletheia-embroiled-in-litigation-sec/#commentsFiled under: , , , ,

Barnes & Noble (BKS) is currently enmeshed in something of a sideshow as the financial and publishing worlds speculate over the extremely unlikely and potentially disastrous prospect of a merger with rival book retailer Borders (BGP). With talk subsiding, now comes news of another headache: the litigation drama affecting B&N's third-largest shareholder, Aletheia Research and Management, which owns a 17% stake in the book seller.

As DealBook reported earlier this week, the 13-year-old California money management firm worth $7 billion dollars has been rocked by a bitter split between two of its founding members: CEO Peter J. Eichler Jr. and former CFO Roger B. Peikin, who was largely responsible for the company's business operations until his employment was terminated earlier this year.

In a complaint filed late last month in California State Superior Court, Peikin calls Eichler's ongoing activities "a tale of unchecked greed and hubris" and accuses "the not-so-benevolent dictator" Eichler, allegedly a "domineering and controlling" despot who "rules Aletheia with an iron fist," of staging a coup to oust Peikin "and seize unfettered control" over Aletheia. Peikin still holds a 28% stake in the firm.

"A Tale of Unchecked Greed and Hubris"

At issue, according to Peikin, are Eichler's trading practices, general disregard for regulatory controls, wanton expenditure of corporate assets for Eichler's personal benefit, and overall neglect of the business side of Aletheia's operations." Peikin further charges that Eichler engaged in "the manipulation of client accounts through the late allocation of trades, the 'busting' of unfavorable trades and the re-allocation of under-performing securities to Aletheia's broker-dealer's account," and that Eichler used his own personal account to trade millions of dollars in securities, even though doing so violated company protocol.

An ongoing investigation by the SEC over improprieties relating to record- and book-keeping practices also exacerbated tensions between the two men, though a settlement is evidently in the works.

A New Malibu Home and Lavish Hotel Suites

Furthermore, according to Peikin, Eichler has a regular habit of transferring Aletheia funds into his own personal account, which he then uses for his own personal gain, to the tune of millions of dollars for a new home in Malibu, renovating company offices, and expenditures of between $16,000 and $18,000 a night on lavish hotel suites. Eichler also appeared to be grooming his successor in the form of his son, Peter Eichler III, who was brought into the firm in mid-2009.

As a result, per the complaint, Eichler allegedly began a systematic campaign to strip Peikin of any power starting around the arrival of Eichler's son, seizing control of bank accounts and blocking Peikin from having check-signing authority and online account access -- even though Aletheia's bylaws "required two signatures on checks over $1,000." Peikin, who was fired by Aletheia's Board of Directors in June, further accuses Eichler of instructing Aletheia employees to intercept emails, phone calls, and secretly search Peikin's offices and image computer hard drives.

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Peikin seeks monetary damages from Eichler and Aletheia for breach of contract, wrongful termination and breach of fiducary duty. He is represented by the Los Angeles lawyer Ellyn S. Garofalo. Lawyers for Aletheia told Dealbook that Peikin's claims do not have merit: "He was terminated for his many failures to fulfill his duties. The firm is now responding to and working through the remaining issues caused by Mr. Peikin's nonperformance."

A B&N spokeswoman declined to comment to DailyFinance. But clearly the spotlight now being shined on Aletheia's less-than-satisfactory business practices and legal troubles is the last thing B&N needs as it prepares to entertain serious sales offers. The company's proxy fight with its second largest-shareholder (and alleged Aletheia ally) Ron Burkle may be over for now, but a 17% stake is hardly small. And if that stake is fraught with questions of improper trading practices, and the money involved includes B&N shares, the company may need to figure out any means necessary to divest itself of a troublesome investor and move that much more definitively towards its future -- public or private.


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]]>Aletheia Research and ManagementBarnesbarnes and noblebksBordersBooksbreach of contractlawsuitlitigationPeter EichlerRoger PeikinSEC investigationSarah WeinmanWed, 08 Dec 2010 13:15:00 ESTWhy Borders' Buyout Bid for Barnes & Noble Has an Unbelievable Plothttp://www.dailyfinance.com/2010/12/06/borders-barnes-and-noble-buyout-bid-offer-riggio-ackman-lebow/http://www.dailyfinance.com/2010/12/06/borders-barnes-and-noble-buyout-bid-offer-riggio-ackman-lebow/http://www.dailyfinance.com/2010/12/06/borders-barnes-and-noble-buyout-bid-offer-riggio-ackman-lebow/#commentsFiled under: , , , , , ,

When Barnes & Noble (BKS) first announced it was "exploring strategic alternatives" -- corporatespeak for looking into a possible sale -- we at DailyFinance entertained the fanciful notion that its nearest rival, struggling book retailer Borders (BGP), might put in a bid to buy the larger company.

But I didn't really think much of the idea beyond its entertainment value because of Borders' own ongoing troubles. The company has experienced multiple rounds of layoffs and several consecutive money-losing quarters, its stock price is hovering in the $1 range and its digital strategy in all respects lags far behind both of its bricks-and-mortar and online rivals.

Yet Pershing Square Capital owner William Ackman, who leads all Borders shareholders with a 37% stake in the company (up from 31% as of of May) appears to think the idea of Borders buying B&N is legitimate. According to Borders' most recent SEC filing, Ackman is prepared to finance the retailer such that it could make an offer to buy out B&N in an all-cash transaction valued at $16 per share, or approximately $963.2 million.

That bid would represent a 20.5% premium on B&N's closing share price of $13.28, and Ackman would be prepared to "finance, on mutually acceptable terms, an offer for mixed stock and cash consideration, to the extent BKS stockholders prefer to share in the substantial synergies of the business combination and receive equity in the combined company."

And with that, talk of a Borders-B&N merger is back on, reviving rumblings that have persisted since 2008, when Borders put itself up for sale, and B&N elected not to bid.

Reminiscent of Another Failed LeBow M&A Effort

The shoe may seem to be on the other foot, but really, it's anything but. For one thing, even though Ackman is in the news as the leading figure in the buyout, the tactics have Borders Chairman and CEO Bennett LeBow written all over them. LeBow muscled his way into Borders' top position by acquiring a considerable amount of stock and warrants that, when they came due, gave him a 35% stake in the company.

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Past precedent shows that LeBow's modus operandi with companies is to buy his way into one, use it in an attempt to buy a bigger company -- and sink both businesses in the process. In fact, the potential B&N-Borders merger echoes another M&A disaster from the late 1980s: The LeBow-controlled MAI Basic Four attempted to buy larger competitor Prime Computer in a hostile takeover bid. Things didn't end up so well for either company, with both ending up filing for Chapter 11 bankruptcy. LeBow was out of the computer business entirely by 1995.

The timing of Ackman's announcement is also noteworthy. On Dec. 9 -- the last day possible before the SEC starts asking uncomfortable questions about the company's financial status -- Borders will report its third-quarter earnings. They're expected to be anemic, certainly much more so than Barnes and Noble's quarterly earnings, which were reported last week and weren't exactly fabulous either.

Talk of a merger would certainly wake up otherwise sleepy investors who need all the help they can get to be excited about Borders' future, which even a spectacular holiday season won't be able to turn around. (And indeed, the merger talk has awakened investors: Barnes & Noble shares were trading Monday morning at $2.39, up 18%, at $15.60. BGP stock is up 19 cents, or 18%, at $1.27.)

Offer May Incite Riggio to Make His Own Bid

To keep investors' attention, though, Borders will have to demonstrate somehow that it has the ability -- and the cold hard cash -- to make this buyout work. If it's all smoke and mirrors, then the upshot could be a redux of the Tribune (TRBCQ) buyout. The 2007 acquisition of that old media empire by billionaire real estate owner Sam Zell has disintegrated into an extended bankruptcy court drama, accusations of fraud and the evaporation of hundreds of millions, if not billions of dollars in value that was never really there in the first place.

Instead, the sleeping giant that the merger news will likely wake up is B&N founder and Chairman Leonard Riggio. His recent anointment as Publishers Weekly's "Person of the Year" is more puff piece than real accolade, but again, the timing happens to be right on the money. The plaudits will remind B&N investors of why the majority backed Riggio and his slate of candidates for the board of directors in their proxy fight against B&N's second-largest shareholder, Ron Burkle.

The move by Borders may finally spur Riggio to make his own long-expected bid to buy B&N, likely in tandem with private equity. So far, CNBC reports that six private-equity companies have signed confidentiality agreements to get involved with a B&N bid. Neither Borders or Ackman, however, have signed such an agreement.

Accelerating a Downward Spiral?
In the end, Borders making a play for B&N makes sense only if you prefer your business news to resemble a reality-TV show. It's not a serious overture, and even if it is, it would be difficult, and not economically feasible, for B&N to accept a bid from a company it has repeatedly said no to in the past.

And as for Borders, if a merger was its plan for saving itself, expect B&N's rejection of the deal to accelerate its downward spiral -- an end that, sadly for the publishing industry, is likely to come sooner rather than later.


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]]>Barnes and NobleBennett LeBowbookstoresBordersborders Barnes and Noble bidbuyoutebooksLeonard RiggioMAmergers and acquisitionsPershing Square CapitalpremiumpublishingSam Zellstrategic alternativesTMStribunetribune media servicesWilliam AckmanSarah WeinmanMon, 06 Dec 2010 11:22:00 ESTOprah's New Book Club Pick Has a Dickensian Feelhttp://www.dailyfinance.com/2010/12/06/oprahs-new-charles-dickens-book-club-pick/http://www.dailyfinance.com/2010/12/06/oprahs-new-charles-dickens-book-club-pick/http://www.dailyfinance.com/2010/12/06/oprahs-new-charles-dickens-book-club-pick/#commentsFiled under: , , ,

Oprah WinfreyOn the very day that Oprah Winfrey chats with Jonathan Franzen, the author of her most recent Book Club pick, she's set to announce that the next selection will be an even more familiar literary face: Charles Dickens.

As the Associated Press reported yesterday and now confirmed elswhere, Winfrey has selected Dickens's classic novels A Tale of Two Cities and Great Expectations, which will be reissued together as a single, 800-page volume with the Oprah's Book Club sticker from Penguin Classics (PSO). The paperback edition has a list price of $20, while Penguin's e-book edition will sell for $7.99.

Oprah Book Club version of Charles Dickens's Of course, that's the "official" edition, and the Penguin Classics version will be the only one bearing the Oprah's Book Club logo (pictured). But because Dickens's novels have long been in the public domain, readers can also purchase the Barnes & Noble (BKS) Classics paperback editions of either Great Expectations or A Tale of Two Cities for less. Or they can download either book as a free Kindle (AMZN) edition, a free e-book from Project Gutenberg or a $1.99 copy that can be read on B&N's Nook e-reader.

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As a result, while Penguin will be the obvious beneficiary of Oprah's book club benediction, just in time for the holidays and to the tune of six-figure sales, Barnes & Noble will be the second-most obvious winner here. The largest book retailer in the country can easily create in-store displays that champion its own, and far cheaper, classic editions of the Dickens books alongside the Penguin versions. B&N Classics copies may not be able to show the Oprah's Book Club sticker, but they won't need to -- especially if they're displayed with a sign that clearly indicates that Oprah chose these books.

Beyond which publishers and retailers will benefit, Oprah's newest selection continues a peculiar skewing toward male-only picks that has persisted since 2003. Of the 22 books she has chosen for the Book Club, 20 are by men -- and a perfect 16 for 16 since January 2005. At this point, it seems ever likelier Oprah won't break this record until her show goes off the air in September and she migrates to her own cable network -- where the Book Club audience as a whole may well shrink.


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]]>A Tale of Two Citiesbarnes and noblebooksCharles DickensGreat ExpectationsOprah WinfreyOprahs Book ClubPenguin ClassicspublishingSarah WeinmanMon, 06 Dec 2010 11:13:00 ESTWill a Dying Banker's Investment Book Bring Seven-Figure Advance?http://www.dailyfinance.com/2010/12/02/will-dying-bankers-investment-guide-bring-seven-figure-advance/http://www.dailyfinance.com/2010/12/02/will-dying-bankers-investment-guide-bring-seven-figure-advance/http://www.dailyfinance.com/2010/12/02/will-dying-bankers-investment-guide-bring-seven-figure-advance/#commentsFiled under: , , ,

Gordon Murray was once the managing director for both Lehman Brothers and Credit Suisse First Boston. Dan Goldie was a world-class tennis player who made it all the way to the Wimbledon quarterfinals in 1989 -- beating Jimmy Connors, but losing to Ivan Lendl. Now the two men have collaborated on an unexpected, self-publishing success that has major publishers interested to the tune of possible seven-figure advances -- even though the 60-year-old Murray does not expect to live to his next birthday.

As The New York Times reported late last month, Murray, who was diagnosed in 2008 with glioblastoma, an aggressive brain cancer, decided to cut short treatment five months ago. With time running out, Murray set to write what became the 96-page paperback The Investment Answer, which offers commonsense advice on financial planning and asset allocation that upends the typical Wall Street-style ethos of wanting to beat the market.

Murray co-wrote the book with Goldie, who turned to investment planning after retiring from his tennis career and became a registered investment adviser for Dimension Fund Advisors, which also hired Murray as a consultant in 2001.

On Amazon's Top 10 and Out of Stock

Though The Investment Answer was self-published and first released in September, it took the Times story and a follow-up piece from RIABiz.com to kick-start the buzz. The paperback was ranked in Amazon's top 10 throughout this week (and is out of stock there and in most online retail outlets). And though Goldie didn't respond to request for comment, industry newsletter Publishers Lunch reported Wednesday (and also confirmed by DailyFinance) that he and Murray's agent, Laurie Liss of Sterling Lord Literistic, "is well along the path towards a sale, reportedly with multiple seven-figure bids offered and a deal announcement expected shortly."

At first glance, Murray and Goldie's book would be a natural for a large publishing house to acquire. Past precedent on self-published titles shows that when one sells well -- at least 5,000 copies, preferably more -- and has a built-in audience and market, major houses will bite, and pay well in doing so.

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What also makes The Investment Answer appealing as an acquisition for publishers is, unfortunately, Murray's imminent death. The situation is reminiscent of The Last Lecture, an inspirational book about achieving childhood dreams by Carnegie Mellon professor Randy Pausch, which was written after he received a terminal diagnosis in 2007. Pausch died of pancreatic cancer in 2008, and The Last Lecture, which was published by Hyperion with a high seven-figure advance, proved to be a New York Times bestseller.

But one editor who was involved early on in the auction process for The Investment Answer offers a note of caution. Murray and Goldie's book, unlike The Last Lecture, is basic investment advice, not inspirationally minded. "This is copycat thinking, and someone's going to get burned." That is, unless Murray and Goldie somehow transform The Investment Answer into something that's a hybrid of advice and uplifting memoir. But Murray's time may run out before such a solution comes to pass.

Update: the Associated Press reported Thursday afternoon that Business Plus, an imprint of Hachette Book Group division Grand Central Publishing, will republish "The Investment Answer" in a new edition by January 25. Terms were not disclosed, but bidding is believed to have exceeded $1 million.

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]]>booksDan GoldieglioblastomaGordon Murrayinvestment adviceThe Investment AnswerSarah WeinmanThu, 02 Dec 2010 07:10:00 ESTOprah to Announce Next Book Club Pick on Mondayhttp://www.dailyfinance.com/2010/12/01/oprah-book-club-pick-monday-announcement/http://www.dailyfinance.com/2010/12/01/oprah-book-club-pick-monday-announcement/http://www.dailyfinance.com/2010/12/01/oprah-book-club-pick-monday-announcement/#commentsFiled under: , , ,

Oprah to Announce Next Book Club Pick on Monday Oprah Winfrey is on a farewell tour of sorts, what with The Oprah Winfrey Show ending its 25 year run in 2011. But those who were saddened by the thought that Jonathan Franzen's No. 1 bestseller Freedom might be her final pick for her wildly popular Book Club can breathe a little easier: You get at least one more.

According to the Associated Press, Oprah will select a new book for instant bestsellerdom on Dec. 6. That's the same day that Franzen will make his appearance on the show, almost a decade after the author was infamously disinvited by Oprah after he expressed discomfort with the selection of his literary bestseller, The Corrections.

But what will Oprah's 65th Book Club pick be? Cursory sleuthing on DailyFinance's part reveals that the book, which will be published as a trade paperback on Monday and priced at $20.00 (discounted to $13.60 on Amazon (AMZN), with the Kindle edition priced at $7.99) is published by Penguin. (PSO) The publisher even had a landing page at one point, though it has since been removed (Google Cache, however, saved the details.) Amazon also classifies the book in the "novelty", "fiction-general" and "non-classifiable" categories.

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What's interesting about this Book Club pick is that Harpo Productions announced the impending selection with less than a week to spare, which appears to be the fastest turnaround time in the show's history. The lid is being kept on tight this time out: Other recent Book Club picks were tipped in advance by independent booksellers who published available information such as price, ISBN numbers and the like online in advance of the official announcement.

Most notably for the publishing industry, perhaps, is the listed Kindle price: $7.99 is significantly lower than what Kindle books from Penguin and related imprints cost, thanks to their adherence to the agency model, under which retailers take a 30% cut from the digital list price. This model often means customers pay more than they would for books sold by publishers using the wholesale model, under which retailers sometimes discount from the hardcover price and sell at a loss.

Penguin did not respond to requests for comment.



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]]>authorBestSellersebookJonathan FranzenkindleOprah WinfreyOprahs Book ClubPenguin Bookstalk showThe Oprah Winfrey ShowSarah WeinmanWed, 01 Dec 2010 10:24:00 ESTBarnes & Noble's Earnings Rise Slightly, but Profits Fallhttp://www.dailyfinance.com/2010/11/30/barnes-and-nobles-earnings-rise-slightly-but-profits-fall/http://www.dailyfinance.com/2010/11/30/barnes-and-nobles-earnings-rise-slightly-but-profits-fall/http://www.dailyfinance.com/2010/11/30/barnes-and-nobles-earnings-rise-slightly-but-profits-fall/#commentsFiled under: , , , , , ,

Barnes & Noble's Earnings Rise Slightly, but Profits FallIt has been a tumultuous year for Barnes & Noble (BKS), the country's largest bookseller. The company has been through proxy fights and poison pills, has been put up for sale -- with no deal visible on the horizon -- and has seen further erosion in the chain bookstore business model. Selling masses upon masses of printed books in bricks-and-mortar stores nationwide, as it has done for the past two decades, isn't an easy way to turn a profit anymore.

B&N's earnings report for its second quarter, which ended Oct. 30, is particularly indicative of the complexities inherent in trying to adapt to an increasing digital market while also trying to hang on to what allowed the company to grow so large, both in size and in importance for the publishing industry.

Overall, total sales for the second quarter were $1.9 billion, which included $798 million in revenue generated by the company's College division, which was folded into B&N proper in August 2009 in a deal that has generated a number of ongoing lawsuits. Taking out the College earnings, B&N sales increased by 1% from the same period last year, but that overall number is still a little less than the $1.98 billion in revenue analysts had predicted.

More telling is B&N's reported net loss for the quarter, which was $12.6 million, or $0.22 a share, as compared to the $23.9 million the company lost 12 months earlier. B&N's net loss is technically within the guidance issued by the company in their last quarterly report, which ranged from a gain of $0.05 a share to a loss of $0.25 a share, but analysts were expecting a smaller net loss of $0.08 a share. B&N also reported earnings before interest, taxes, depreciation and amortization (EBITDA) of $46 million, and comparable store sales suffered a 3.3% decline overall, and a 1.1% decline at its B&N College stores.

The Future Is Nooks and Toys

But there was better news on the online side, as well as from toys and games, continuing an earlier trend. BN.com comparable sales increased 59%, largely attributable to the growth in digital products like the Nook e-reader and its more expensive cousin, NookColor, which B&N claims has become "the single bestselling product" for the company since its Nov. 16 release. The company reported a 42% sales increase in its toys and games department during the second quarter, and now that it's testing out an expanded "toy-store-within-a-store" model in select stores, further sales increases on the toys and games side are expected in 2011.

In a statement, CEO William Lynch noted, as he has in the past, that B&N has "quickly captured" 20% of the digital book market. And the rest of his remarks were focused entirely around digital content: "Based upon the double-digit comparable store sales achieved over the past weekend, we are further convinced that eReaders and accessories will be a key holiday gift item and driver of holiday sales this year, leading to accelerating eContent sales in the quarters and years ahead. We're continuing to invest in this opportunity to build the most expansive catalog of digital content available for sale, the best reading software on the market, and devices that deliver the most innovative digital reading experiences."

Looking ahead, B&N says it expects to continue investing heavily in digital initiatives related to its Nook line, investments which will peak during the second half of the year, then increase moderately going forward. But the company expects those investments to start reaping returns in the third quarter, as customers snap up more NookColor's and start buying content for the devices. That's also in line with company expectations that comparable sales online and in stores will rise during the holiday season: a 75% increase online for the third quarter and the year, and 5% to 7% in the third quarter for bricks-and-mortar stores. Already during the Thanksgiving holiday, in-store comparable sales jumped 17.2%, while online sales rose 105.7% compared to the 2009 holiday.

B&N says it expects to achieve EBITDA of approximately $160 million to $190 million and $170 million to $205 million, for the third quarter and the full year, respectively. Third quarter earnings per share are expected to be in a range of $0.90 to $1.20. Full-year fiscal 2011 losses per share are expected to be in a range of $0.75 to $1.15.

Unsurprisingly, the markets weren't pleased with B&N's results: Shares dropped down 4.2%, in premarket trading Tuesday, then plummeted to $12.27 at market open, down 14%. While the price recovered a bit later in the morning, shares were still in the neighborhood of $13.50, down around 9%.

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]]>Barnes and NobleBarnes and Noble earningsBarnes and Noble Nookbarnes and noble nook colorbarnes and noble proxy fightBarnes and Noble quarterly reportsbarnes and noble revenuebooksellinge-bookse-readerE-readerseBookeReaderereadersgamesNookNookColortoysSarah WeinmanTue, 30 Nov 2010 11:11:00 ESTGawker Is on Shaky Legal Ground Over Sarah Palin Book Excerptshttp://www.dailyfinance.com/2010/11/22/gawker-sarah-palin-book-excerpts-fair-use-copyright-judge-lawsuit/http://www.dailyfinance.com/2010/11/22/gawker-sarah-palin-book-excerpts-fair-use-copyright-judge-lawsuit/http://www.dailyfinance.com/2010/11/22/gawker-sarah-palin-book-excerpts-fair-use-copyright-judge-lawsuit/#commentsFiled under: , ,

When media and gossip site Gawker posted pages from Sarah Palin's upcoming book America By Heart last week, it did so using images of the pages, not simply the text itself. Presumably, that was a way for the site to get around accusations it had infringed the copyright of Palin and her publisher, HarperCollins (NWS).

Indeed, the follow-up post to the excerpt originally contained a taunt to Palin that she should read pages about fair use under copyright law. "Or skip the totally boring reading and call one of your lawyers," the Gawker post said. "They'll walk you through it."

Instead, it appears Palin is having the last laugh, at least for now. HarperCollins sued Gawker late Friday for copyright infringement, and Saturday a federal judge ordered Gawker to take the pages down until a scheduled hearing takes place in New York Southern District Court on Nov. 30. (Politico posted the order here.) In a statement issued by the publisher, a HarperCollins spokeswoman said: "We see the ruling as a victory. Gawker shouldn't have posted this. It's a copyright infringement. We are defending our author and our publication."

Supreme Court Reversal

With America By Heart slated for release on Tuesday, it's easy to conclude that the legal action is less about principle and more about drumming up publicity for a book that, while expected to be successful, may not reach the sales plateaus of Palin's 2009 bestseller Going Rogue. But HarperCollins does have principle, or at least precedent, in its corner: Back in 1985, when it was still known as Harper & Row -- and several years before News Corp. bought the company -- it won a judgment against The Nation for publishing a 400-word, quote-heavy excerpt of former President Gerald Ford's memoir without permission, which jeopardized a deal the publisher had struck with Time magazine for exclusive first-serial rights.

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After an appeals court reversed the ruling on fair-use grounds, the case went all the way to the Supreme Court. The high court reversed the reversal, and the opinion as written by Justice Sandra Day O'Connor outlined why: The fair use doctrine did not apply to the unpublished work of an author, even a famous public figure like former President Ford, with significant potential interest in what he had to say about historic events. To quote from the ruling, "the copyright owner would have the right to control the first public distribution of an authorized copy. . .of his work."

Gawker can, and likely will, argue that other publications, such as the Associated Press, published excerpts from America By Heart in advance of the book's on-sale date. But the real question is whether, in light of the precedent set by the Supreme Court's 1985 ruling, it will be worth it for Gawker to fight this particular battle. Past precedent says it won't: After being sued by actors Rebecca Gayheart and Eric Dane for releasing a video of their sex tape with another woman, they and Gawker eventually settled for an undisclosed amount.

With the Palin book excerpts taken down, it seems likely that the Nov. 30 hearing will simply rubber-stamp a potential settlement -- and be an opportunity for both sides to proclaim victory. Of course, HarperCollins is likely quietly hoping that the added publicity helps propel America By Heart up the holiday bestseller lists.

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]]>America By HeartBestSellerbookscopyrightcopyright infringementcopyright lawfair useGawkerGawker MediaHarperCollinslawsuitNews CorppublishingSarah Palintea partySarah WeinmanMon, 22 Nov 2010 16:10:00 ESTAmazon Makes It Easier to Give E-Books as Giftshttp://www.dailyfinance.com/2010/11/19/amazon-kindle-ebook-gifts-holiday-shopping/http://www.dailyfinance.com/2010/11/19/amazon-kindle-ebook-gifts-holiday-shopping/http://www.dailyfinance.com/2010/11/19/amazon-kindle-ebook-gifts-holiday-shopping/#commentsFiled under: , , , , , , ,

With the holiday shopping season about to kick into high gear, Amazon (AMZN) announced something today that it probably should have done years ago. Now, you can send actual e-books as gifts to others, whether they have a Kindle or not.

"We are thrilled to make it easier than ever for our customers to give their favorite Kindle book to a friend or family member as a gift," said Amazon Vice President Russ Grandinetti in a statement. "We're making this functionality available in time for the holidays to offer an easy, stress-free holiday shopping option for anyone -- not just Kindle owners."

From the looks of things, giving Kindle books as gifts will indeed be fairly easy: Choose a book from the Kindle store, select "Give as a Gift" and send it to anyone with an email address. Recipients then get notified they have a gifted e-book waiting for them.

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Amazon's move comes days after rival e-reader firm Kobo announced that it would allow customers to give e-books as gifts. But while the Canadian-based company said that feature wouldn't be available until early December, Amazon has opened up the gifting option immediately.

Such swift and decisive moves have been one of Amazon's hallmarks: This week, the company also announced it was effectively getting into the film business, and that it had acquired the back catalog of the Toby Press, a small publishing house devoted to literary fiction and translated works.

This two-pronged approach of meeting the evolving needs of its customers while also moving more definitively into media and publishing circles puts Amazon in a very strong position going into 2011. Earnings and profits are up in 2010, and Kindle device and e-book sales have a lot to do with that.

Still, the infrastructure and manufacturing costs of being the dominant e-book player, plus Amazon's intensifying push into the media market, may threaten to undermine its core business: selling products, and lots of them.

At the moment, Amazon seems to want to be all things to all possible customers and partners. The online giant has the monetary muscle to stay that way for the time being, but one misstep -- say, a large acquisition gone wrong, or a hefty tax bill -- could send its fortunes spinning off in the wrong direction.





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]]>amazonAmazon Studiosbookschristmas giftschristmas shoppinge-book giftse-bookse-readersgiftsholidayholiday shoppingipadiphoneKindlekoboonline shoppingpublishingThe Toby PressSarah WeinmanFri, 19 Nov 2010 12:00:00 ESTBooks-A-Million Earnings Drop in Third Quarterhttp://www.dailyfinance.com/2010/11/19/books-a-million-earnings/http://www.dailyfinance.com/2010/11/19/books-a-million-earnings/http://www.dailyfinance.com/2010/11/19/books-a-million-earnings/#commentsFiled under: , , , ,

Books-A-Million (BAMM), the country's third-largest bookseller, is nowhere near as prominent as competitors Barnes & Noble (BKS) and Borders (BGP), and often flies under the radar of investors. But it faces the same pressures affecting all chain bookstores, what with sales declines of print books and a need for alternative revenue streams to make up for the continued shortfalls -- just without the melodrama of proxy fights and a potential buyout, in B&N's case, or the agony of repeated layoffs and public criticism of new non-book items, as is the case for Borders.

Books-A-Million's earnings report for the third quarter ending Oct. 30 isn't very good, and can't be spun in a very positive light. Not when net sales decreased 5.5% to $104.8 million, from $110.9 million a year ago, the company's net loss for the quarter climbed to $1.7 million, or 11 cents a share (from $1.6 million at this time last year) and comparable store sales dropped 5.8% from the same period 12 months before.

Looking at Books-A-Million's fortunes for the first three quarters combined, net sales are down 2.8% to $341.8 million, comparable store sales declined 4.2%, and net income is actually up a little bit -- $2.2 million, or 14 cents per diluted share, compared with net income of $1.9 million, or 12 cents per diluted share, for the year-earlier period.

Cost-Conscious Consumers Buying Fewer Hardcovers

Chairman, President and CEO Clyde Anderson didn't mince words, singling out the comparable store sales in particular as being "disappointing" in a statement released Thursday afternoon. He added the company "faced a tough comparison to last year's bestseller lineup" and cited another big factor: "a cost conscious-consumer buying fewer hardcover books."

There were, however, "continued positive trends in bargain books and gifts" and looking ahead, BAMM is particularly excited about "our new toy, gift and electronics departments, our entry into the video game business, our expanded offering of DVDs and the introduction of the NOOK range of e-readers, including NOOKcolor."

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That last part is what investors and the publishing industry should zero in on. Until they signed a deal with Barnes & Noble to stock the top bookstore chain's e-reading devices, Books-A-Million didn't have a real presence in the digital world. But just in time for the holiday season, the company's customers can walk into stores and take part in the growing e-book market and actually see affordable black-and-white and color e-readers up close. And, hopefully, plunk down some money to buy one.

Books-A-Million, with this deal, stands to reap tidy earnings and profits, while also presumably helping B&N's bottom line as well. As a result, it seems likely that the no. 3 retailer will end fiscal year 2010 on a more positive note, and bring further good cheer into 2011.


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]]>Books-a-Millionbooks-a-million earningsBooks-A-Million lossbooks-a-million quarterly reportsBooks-A-Million salesbooksellerse-bookspublishingquarterly reportsSarah WeinmanFri, 19 Nov 2010 06:40:00 ESTBarnes & Noble Shareholders Rubber-Stamp Poison Pill Measurehttp://www.dailyfinance.com/2010/11/17/barnes-and-noble-shareholders-rubber-stamp-poison-pill-burkle-riggio/http://www.dailyfinance.com/2010/11/17/barnes-and-noble-shareholders-rubber-stamp-poison-pill-burkle-riggio/http://www.dailyfinance.com/2010/11/17/barnes-and-noble-shareholders-rubber-stamp-poison-pill-burkle-riggio/#commentsFiled under: , , , ,

Barnes & Noble Shareholders Rubber-Stamp Poison Pill Measure When Barnes & Noble (BKS) enacted a poison pill measure that effectively prevented outside investors from amassing 20% or more of total company shares, it kicked off a long, acrimonious proxy fight by billionaire Ron Burkle to reverse the move -- and to find his way onto the board of the country's largest bookseller. But when Burkle's efforts were denied earlier this fall, and his hope to bump up his stake in the company from its current 18.8% to somewhere north of 30% was dashed, the yearlong drama more or less came to a resting point.

That made Wednesday's shareholders meeting to decide on the fate of the poison pill all but a formality. According to Reuters, founder, chairman, and newly re-elected board member Leonard Riggio announced that preliminary results showed 72% of the votes cast supported the poison pill, which will now stay in place for the next two years. Burkle and his company, Yucaipa Cos., did not solicit other shareholders to its position, deviating from his strategy before the previous meeting in September.

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Beyond the fact that it blocks Burkle's ambitions, the provision has a few other effects. As the company outlined in a note to shareholders last month, Riggio -- who currently owns a roughly 30% stake in B&N -- can't accumulate any more shares. Nor can B&N grant any more shares to other Riggio family members (such as younger brother and former CEO Stephen.) And if anyone related to or connected to the Riggios acquires additional shares by exercising options, they have to divest themselves of those options within 60 days. (In possibly unrelated news, Aletheia Research & Management, the No. 3 stakeholder, decreased its company holdings to just over 14%.)

With formalities dispensed of, there's a small matter of the company's immediate and long-term future. B&N effectively put itself up for sale last August, and after reports that approximately 20 entities had expressed interest, The Wall Street Journal says that today, the number of potential buyers has dropped to between eight and 10 strategic companies and private-equity firms. Its newest e-reader, NOOKColor, has been getting mostly favorable reviews, and has already started shipping in advance of its announced Nov. 19 launch date. B&N has also made a more serious move into the toys and games market, debuting 3,000-square foot stores-within-stores in the New York tri-state area. And the general buzz around e-readers for the holidays puts B&N in a positive mood, with its digital market share well in hand.

Optimism, however, hardly translates into certainty of results. In advance of its next quarterly filing on Nov. 30, analysts forecast that B&N will lose $0.39 per share this year, based on 60.2 million shares outstanding. And while Burkle may have been thwarted in his plan to up his share count, he also cannot be counted out -- especially if Leonard Riggio, as expected, figures prominently in the company's possible sale.


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]]>Aletheia Research and ManagementBarnes and Noblebooksellinge-readersLeonard RiggionookNOOKcolorpoison pillproxyproxy battleProxy fightpublishingRon Burkleshareholders meetingyucaipa cos.Sarah WeinmanWed, 17 Nov 2010 12:17:00 ESTPublishing Puzzle: Chelsea Handler Gets Her Own Book Imprint from Hachettehttp://www.dailyfinance.com/2010/11/16/chelsea-handler-hachette-book-imprint-editor-publishing/http://www.dailyfinance.com/2010/11/16/chelsea-handler-hachette-book-imprint-editor-publishing/http://www.dailyfinance.com/2010/11/16/chelsea-handler-hachette-book-imprint-editor-publishing/#commentsFiled under: , , ,

Chelsea Handler Gets Her Own Book Imprint from HachetteWhen the publishing industry wants to reward an editor's ability to bring in the bestseller bacon -- or sweeten the pot on a job offer -- the solution is often a new imprint, ideally one with their name on it. Just last week, former Simon & Schuster (CBS) publisher David Rosenthal was hired by Penguin (PSO) to launch his own imprint, which will start publishing between 24 and 36 titles as of fall 2011. That move perplexed many in the industry, because the company is already chock full of eponymous imprints, from Amy Einhorn (who published the million-copy bestseller The Help) to Pamela Dorman to Marian Wood.

But Monday night, Grand Central, part of the Hachette Book Group (LGDDY), raised the bar for head-scratching behavior by awarding Chelsea Handler, host of the comedy show Chelsea Lately on E! Entertainment, her very own imprint. According to Deadline.com, the imprint, called Borderline Amazing/A Chelsea Handler Book, will launch in May 2011 with Handler's newest book, Lies that Chelsea Handler Told Me, followed by two other books -- one ostensibly written by her dog, Chunk, and another still to be determined. The eventual idea, however, is for Handler "to hatch books from some of the talent that appears on her show."

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Handler's deal differs dramatically from the traditional way imprints are awarded. Editors toil for years within a business, rising up through the ranks until their contributions to a company's overall profit margin are substantial enough that failing to give them that icon of respect could mean losing them to another publishing house. Handler, obviously, hasn't done anything like that. Rather, her growing celebrity has come about as she's moved from stand-up comic to television personality to a more entrepreneurial type with three bestselling books to her credit. With each book, she's changed publishers, starting with Bloomsbury, going to S&S imprint Gallery Books and, with her last book, Chelsea Chelsea Bang Bang, landing at Grand Central.

That makes her new imprint something more along the lines of the editor-at-large deals recently struck by Random House with brand-name magazine editors Ruth Reichl (formerly of Glamour) and Jon Meacham (formerly of Newsweek.) Their editorial duties perfectly dovetailed with the news that their next books were under contract through handsome deals made with -- you guessed it -- Random House. In other words, these deals are less about broadening editorial sensibilities and more about securing surefire brands and figuring out how to exploit them.

If Grand Central is thinking that Handler's imprint is a long-term investment, they'd be well advised to look at what's happened with another celebrity imprint that launched with a big splash a few years ago. That would be G Unit Books, rapper 50 Cent's publishing venture, which released a handful of novels with an urban feel through Simon & Schuster between 2007 and early 2009 -- and nothing at all since then. (S&S spokesperson Adam Rothberg clarified by e-mail that G-Unit was not defunct, but confirmed "it had been while since anything had been published" by that particular imprint.) The object lesson for publishing is that hitching one's wagon to a celebrity will always benefit the celebrity more than the publisher -- and that the deal required may be a Faustian bargain.


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]]>booksBorderline AmazingA Chelsea Handler Bookchelsea chelsea bang bangChelsea HandlerChelsea LatelyeE Entertainment TelevisioneditorGrand CentralHachette Book Groupimprintpublishingpublishing industrySarah WeinmanTue, 16 Nov 2010 13:33:00 ESTIs Apple Using Gift Cards to Prop Up a Sagging iBookstore?http://www.dailyfinance.com/2010/11/14/is-apple-using-gift-cards-to-prop-up-a-sagging-ibookstore/http://www.dailyfinance.com/2010/11/14/is-apple-using-gift-cards-to-prop-up-a-sagging-ibookstore/http://www.dailyfinance.com/2010/11/14/is-apple-using-gift-cards-to-prop-up-a-sagging-ibookstore/#commentsFiled under: , , , , , , , ,

Gift cards are among the most popular items given out as presents during the holiday season. Apple (AAPL) has certainly reaped success from its iTunes gift cards, selling them both online and in retail stores to millions of customers for music downloads.

So no wonder Apple is now selling gift cards for iBooks, its e-bookstore platform, in its own stores and also in places like Target (TGT), according to a report by iLounge.

While the obvious reason for Apple to start doing this is to grab more of the buying power from brand-new iPad owners, the less obvious rationale is to bump up sales directly from the iBookstore -- which lags very far behind other e-retailers, as multiple publishing sources have told DailyFinance throughout the summer and fall.

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When the iPad first became available in the spring, it -- and the iBookstore -- was seen as a way for publishers to change the terms of how they approached and sold e-books. Whereas before, retailers like Amazon (AMZN) were selling e-books via a wholesale model, paying 50% of the hardcover list price and then selling e-books to customers at a loss, the arrival of Apple on the scene caused five of the six biggest book publishers to switch to an agency model, with retailers taking a 30% cut of the (much) lower digital list price.

Retailers could instead make a profit off e-book sales, even if author royalties dropped. Amazon may not have been happy to switch to agency terms, but they complied -- and still hold the dominant e-book market share. Barnes & Noble (BKS), thanks to its own e-reader, Nook, has comfortably settled into second place for digital market share, with Kobo, stocked by Borders (BGP), and Sony (SNE), also battling it out. And what of the iBookstore? They aren't much of factor, as one example illustrates all too well.

iBookstore Not "Much of a Factor" in the Race for e-Book Market Share

One New York Times bestselling writer of commercial fiction, in the opening week of her most recent book, sold 140,000 print copies and 50,000 digital editions -- typical numbers for a top-selling writer these days. Where things became more interesting was in the break-down of digital books: 30,000 e-books were sold through Amazon, for a 60% digital share. Approximately 13,000 e-book sales were for the Nook (26%) with just 3,000 e-copies -- 6% for digital, or 0.016% of overall sales -- emerging from the iBookstore. (Sales through Sony were also low, but higher than through the iBookstore.)

These are fairly hard numbers, but other phrases bandied about by publishers, agents and authors include "negligible," "barely a blip" and "hardly on the radar." It was one thing for early sales on the iBookstore to be small -- less than one e-book downloaded per iPad sold for the device's first week on sale -- but continued lagging market share poses a number of questions for Apple. (A spokesperson for the company hadn't answered DailyFinance's request for comment, due to the time zone differences. We'll update with a response accordingly.)

Is the iBookstore platform something Apple takes seriously, or is it happy to cede e-book sales to retailers like Amazon and B&N, which allow their customers to read their books through apps developed for Apple's devices? If the iBookstore is worth all that much to Apple, then what will happen when the current agency model contract is up in April, and what sort of negotiating power will publishers have if they want to alter terms in their favor -- especially if Apple wants terms more to its liking?

Adding the iBookstore gift cards may reinforce that Apple understands it can, and should, sell more books through its own store platform. Customers may well bite, but it may not be enough to make the iBookstore a real player in the e-book sales game.


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]]>booksellinge-booksiBooksiBookstoreiPadiPhoneKindleNookpublishingSarah WeinmanSun, 14 Nov 2010 06:30:00 ESTBig Numbers for Bestsellers Show E-Books Are Here to Stayhttp://www.dailyfinance.com/2010/11/11/big-numbers-for-bush-and-grishams-bestsellers-shows-e-books-are/http://www.dailyfinance.com/2010/11/11/big-numbers-for-bush-and-grishams-bestsellers-shows-e-books-are/http://www.dailyfinance.com/2010/11/11/big-numbers-for-bush-and-grishams-bestsellers-shows-e-books-are/#commentsFiled under: , , , ,

Former President George W. Bush's new book Decision Points was widely expected to be one of the biggest books of the fall, and based on its opening-day sales numbers -- more than 220,000 copies sold -- that's proving to be the case. But what's particularly eye-popping about those figures is not that Bush's book was Random House's best-selling non-fiction title in 16 years (when another former President, Bill Clinton, moved 400,000 copies of his autobiography My Life on its first day of sale) but that 50,000 of those sales came from e-books.

"It shows the digital market's rapid growth," spokesman David Drake of the Crown Publishing Group, the Random House division that published Decision Points, told the Associated Press. Considering that e-sales accounted for more than 20% of the total, "rapid growth" is an understatement.

Numbers released by the Association of American Publishers today show anew just how fast the e-book market is growing, with September e-sales up 188% (to $39.9 million) compared to 12 months ago. Industry newsletter Publishers Lunch suggests e-books now account for approximately 9.5% of total book sales for trade books - that is, fiction and non-fiction. Then there's Forrester Research, with its projection that e-books are inching ever closer to being a billion-dollar market.

Bestsellers Selling Better

What's really astonishing is how much e-books now account for total sales of top commercial titles. Legal thriller writer John Grisham's newest bestseller, The Confession, sold 160,000 hardcover copies in its opening week on sale, according to Nielsen Bookscan, which accounts for approximately 75% of total book sales. At first that appears to be way down from the 223,000 Bookscan-reported copies sold of Grisham's previous thriller, The Associate. But consider: The Confession also sold 70,000 copies in digital formats, as The Wall Street Journal reported earlier this week.

The numbers jump out because Grisham's work wasn't even available in e-book formats until earlier this year. Now they account for about 30% of total sales for his newest books. Last summer it surprised many, myself included, when a bestseller like Laura Lippman's suspense thriller I'd Know You Anywhere sold more e-books than hardcovers in its first week.

It's one thing when Amazon -- which only accounts for single-digit total market share for print titles but anywhere from 60% to 80% on the digital side -- says e-books outsell hardcovers. But when a publisher says the same thing for a given title, it's of real significance. I'd Know You Anywhere was the first (at least for publisher HarperCollins [NWS]) to skew more toward digital book sales, but it will hardly be the last.

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As e-book sales numbers continue to climb against declining overall figures, publishers must ask themselves some thorny questions about cannibalization effects. One solution -- delaying the e-book version by weeks or months -- has proven to be a nonstarter, and it's now all but expected that a book will be released simultaneously in print and digital editions. Finding the right price for the e-book becomes that much more critical, because readers ready to choose digital may be put off if the price exceeds that of a heavily discounted hardcover, or gives the illusion of being too high.

But e-books -- especially those priced according to the agency model, where retailers take a 30% cut from the digital price -- generate lower royalties for authors, and bestselling authors are increasingly making decisions about their future with a publisher based on what sort of digital terms they can secure.

E-books are obviously here to stay -- a fact that was made perfectly clear when The New York Times announced it would create an e-book bestseller list starting in early 2011. But also here to stay are the headaches -- and clearing those up will continue to be one of next year's biggest publishing stories.

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]]>Decision Pointse-booke-booksGeorge W. BushJohn GrishamLaura LippmanRandom HouseSarah WeinmanThu, 11 Nov 2010 19:30:00 EST