Retail News Update

New York – Bowing to the growth in demand for e-books, Barnes & Noble, the world’s largest chain of bookstores, has acquired Fictionwise, an online retailer of electronic books.

Barnes & Noble, which has not recently sold e-books on its Web site, bn.com, paid $15.7 million in cash for Fictionwise.

“The market hasn’t been that developed to date,” said William Lynch, president of bn.com. “We think it’s a big growth area going forward.”

Most publishers say that e-books are only about 1 percent of total book sales. But e-book sales more than tripled last year at a time when overall book sales were flat or falling. According to a survey by Codex Group, a book marketing research company, 3 percent of book sales from mid-December to mid-January were in digital form.

Steve and Scott Pendergrast, who founded Fictionwise nine years ago, will continue to operate its two retail sites, fictionwise.com and eReader.com, as independent brands.

Titles bought on either of these sites can be read on the Apple iPhone as well as on personal computers and other smartphones. Some titles on fictionwise.com can also be read on the Sony Reader. Fictionwise currently has a catalogue of about 60,000 titles.

Scott Pendergrast, the chief executive of Fictionwise, said the company believed that Barnes & Noble would provide “more resources, more contacts with publishers, more content and give us the power to compete in this market as it explodes across the U.S. and the world.”

Bn.com offered e-books early this decade when it sold the Rocket Book, an early e-reader device. Lynch said Barnes & Noble eventually planned to sell e-books directly on its own Web site again, although he declined to say when.

The move sets up bn.com to compete directly with Amazon.com, which sells e-books to be read on its Kindle device as well as on the iPhone.

Publishers welcomed Barnes & Noble’s entry into the market. “We want there to be more players in the marketplace,” said Elinor Hirschhorn, chief digital officer at Simon & Schuster.

“Nobody really likes a monopoly,” said Pat Schroeder, chief executive of the Association of American Publishers, a trade group, referring to Amazon’s lead position as a retailer of both e-books and the Kindle device.

Fictionwise recently signed a partnership deal with Plastic Logic, a company based in Mountain View, California, that plans to start selling an electronic reader next year. Lynch said Barnes & Noble, however, was “not prepared to talk about” any plans to offer its own e-reader.

Source: By Motoko Rich, IHT