Glenn Declares Victory

I win: Barnes and Noble is taking its online division private.I was working at in early 1997 when Barnes and Noble launched its online store. We were more worried about Borders, because folks at Amazon knew that Borders information technology operations were better run than BN. (My boss, a VP, had come from BN, and was frank about what their capabilities were.) We looked at BN's site and realized that while it was okay, that their home page was a marketing message for Microsoft and a bunch of other software makers and hardware makers. They hadn't spent the dollars to build precisely what they needed -- Amazon's approach was very Not Invented Here -- and thus they had to contend with all of the flaws at the time in Windows NT, SQL Server, IIS, and all the other crappy components which are now much more robust but were first or second generation at the time. A couple of years later, when I heard that Bertelsmann had invested a huge amount ($200M) into the spinoff of, the online division, I predicted to many friends and colleagues that the headline in about 3 or 4 years would be, "Bertelsmann admits investment was massive mistake." That happened. Bertelsmann had its shares redeemed a few months. The BNBN tickered was a staggering failure almost from day one. I read a newspaper profile of a fellow who worked at for a few years and had seen his stock go in the crapper. The irony was, I knew the guy: we had wanted to recruit him at Amazon when I was there, but he wouldn't leave New York. If he'd come to Amazon at that time and worked for as long as he did for, he would have made several million dollars in options at today's Amazon stock price or more if he'd sold some at the height of its valuation. (We never made him even an interview offer, so I'm not violating labor law here.) It was clear that didn't understand how to leverage its primacy as a bookstore and beat Amazon at that game. I thought they'd do in-store pickup and returns; in-store ordering; focus on coordinating pricing with some kind of promise like "buy it online or in our store and pay the same." Nope. They pushed some lame discounting, a kind of crappy interface that never improved much, and only recently did they even coordinate anything between bricks-and-mortar stores and the online operation. So the store will continue, but it's terrible sales performance will now be privately reported. Because BN is buying it back, that means that the chain as a whole will have to continue to absorb its losses. We'll see what happens when gets converted from a bookstore to a bricks-and-mortar adjunct like Borders' online operation, which is run by Amazon.