Acquire the bookstore chain to get the digital reading device

With the recent bankruptcy of Borders (see some reaction here), who knows how long Barnes & Noble might be able to hold on (and the news wasn’t good last August). But at least one businessman thinks B&N would make for a worthwhile purchase:

Barnes & Noble is well-situated to get a piece of the action: the company claims that the Nook already accounts for one-quarter of the e-book market. (Amazon’s rival Kindle product accounts for over 70 percent, although neither company discloses actual sales figures.)

Candidly, the Nook’s success is important, because more competition in the space will help keep prices in check and spur innovation. Sony also has a credible market entrant with its Reader product.

Malone’s company Liberty Media offered $17 per share Thursday — or about $1 billion — for a 70 percent stake in Barnes & Noble, a 20 percent premium over the Thursday closing price. Investors greeted the news warmly, pushing Barnes & Noble shares up over 30 percent — yes that’s higher than Malone’s bid! — in midday market action Friday. As a result, Malone will likely have to sweeten his offer to at least $20 per share.

In a statement announcing the offer, Liberty described Barnes & Noble as being at the “forefront of the transition to digital.”

While there is a lot of talk about how all of this affects bookstores and reading, I would love to see more about what this might mean for all brick-and-mortar businesses. The saving grace for Barnes & Noble is this particular digital reader which is well-positioned in a burgeoning market. In the near future, the B&N stores might disappear even as corporate name goes on through this device.

More broadly, how many other companies are actually creating digital content or devices rather than simply putting a Facebook page together and slapping the Facebook logo on all of their commercials?

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