Services & Software

Barnes & Noble acquires e-book seller

Brick-and-mortar giant snaps up for $15.7 million in cash, as it makes another run at an e-book store.

Updated at 8:20 a.m. PST with comment from Barnes & Noble.

Barnes & Noble has acquired e-book seller for $15.7 million, as it makes another attempt at running an e-book store.

The cash deal, announced Thursday, is part of Barnes & Noble's plans to launch its own e-book store later this year, despite its lack of success with a previous attempt years ago.

Back in 2000, Barnes & Noble teamed up with Microsoft to launch an e-book store with the help of Microsoft Reader software. But three years after its launch and investing at least $20 million into the project, Barnes & Noble discontinued sales of e-books.

Although the company did not disclose the reasons for halting its e-book store efforts, a Nielsen/NetRatings analyst speculated at the time that sales had been minimal.

Barnes & Noble spokeswoman Mary Ellen Keating said Friday that the time wasn't right earlier this decade.

"Consumers were not as quick to embrace the technology, the pricing set by the publishers, or the reading devices," Keating said of the previous effort. "We did have growth in our e-book sales, but the growth was not significant enough to support the business at the time."

Apparently, however, consumer tastes and the technology have advanced enough over the past six years to give it another shot.

"The market has changed since then, and we see this as a growth area," Keating said.

Last month, archrival released Kindle 2, the second version of its e-book reader. And earlier this week, Amazon unveiled its Kindle app for the iPhone and iPod Touch.

Fictionwise, which Barnes & Noble will run as a separate business unit, offers its own eReader app for smartphones, other handheld devices, desktop computers, and laptops. Likewise, competitor Lexcycle has its Stanza app for e-book reading.

While consumer interest in e-books has increased over the years, they have yet to attract a mainstream market. Analysts attribute price as the major barrier to the adoption of e-books.