Barnes & Noble Makes another Attempt at E-books

Barnes & Noble appears to be making another attempt at running an e-book store, having purchased Fictionwise.com for $15.7 million. The cash deal is part of Barnes & Noble’s plan to launch its own e-book store later this year.

This will be the second attempt for Barnes & Noble at selling e-books. In 2000, Barnes & Noble and Microsoft teamed up to launch an e-book store using Microsoft Reader software. Three years and at least $20 million after the launch, however, Barnes & Noble discontinued the sale of e-books. At the time, the company didn’t disclose specific reasons for stopping its e-book efforts, but a Nielsen/NetRatings analyst speculated that sales had been minimal.

Barnes & Noble plans to run Fictionwise as a separate business unit. The founders of Fictionwise, Steve and Scott Pendergrast, will continue to operate its two retail sites, fictionwise.com and eReader.com, as independent brands. Fictionwise offers its own eReader application for smartphones, handheld devices, desktop computers, and laptops. Titles purchased from Fictionwise can be viewed on a variety of devices, including the Apple iPhone. Some books can also be viewed on the Sony Reader. Fictionwise’s catalog currently has about 60,000 titles.

Given the recent buzz concerning the Kindle and other e-book readers, it would seem that the time is right for Barnes & Noble to consider a re-entry into the market. Most publishers have said that e-books only account for about 1% of total book sales. Even so, it’s worth noting that e-book sales more than tripled last year. At the same time, overall book sales were flat or falling. What’s more, book marketing research firm Codex Group reports that 3% of book sales from mid-December to mid-January were in digital form.