The Anti-Amazon Cabal Grows: Pearson Takes a Stake in Nook
Not everyone is giving in to Amazon’s (AMZN) domination of the digital book business. Barnes & Noble (BKS) disclosed that Pearson (PSO), the big textbook and media company, agreed to invest $89.5 million for a 5% stake in the book chain’s Nook unit, which sells digital readers (Nooks) and digital books.
Pearson joins Microsoft (MSFT), which earlier invested $300 million in the Nook unit, and the moves suggest some smart minds believe there is room for multiple players in the digital reader and book business.
The longer Barnes & Noble, and its Nook, stick around as legitimate competitors, the longer Amazon is likely to be forced to continue selling its Kindle readers at break-even or a loss, dampening the company’s profits.
Kindle, free shipping, fierce price competition and booming costs have all contributed to a collapse in Amazon’s profit margins, even as rising revenue persuades investors to buy Amazon shares, as seen in a stock chart.
Some hedge fund managers have also bought into Barnes & Noble of late, as YCharts reported earlier.
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