Barnes & Noble has bought Fictionwise, the e-book website that includes eReader and eBookwise, for $15.7 million and will run it as a separate business headed by Steve and Scott Pendergrast, who founded it in 2000. B&N said that it plans "to use Fictionwise as part of its overall digital strategy, which includes the launch of an e-Bookstore later this year." The move greatly expands B&N's presence in e-books, challenges Amazon's run toward Kindle e-dominance and strengthens the position of non-exclusive e-book standards.
"We bought Fictionwise because we like how they've approached the digital and e-book markets," William Lynch Jr., president and CEO of Barnes&Noble.com, told the Wall Street Journal. "They have one of the most popular applications on the iPhone, and they really understand merchandising. They also have a lot of institutional knowledge about this space."
Fictionwise offers more than 60,000 titles and is adding 500 a week, Stephen Pendergrast told the paper. The most popular category is romance, which accounts for half of all sales. Fictionwise has sold as many as five million book titles. Pendergrast estimated total e-book sales in the U.S. last year at $100 million.
Several publishers told the New York Times they are happy about the purchase. Pat Schroeder, CEO of the AAP, said: "Nobody really likes a monoply."
In a piece yesterday on Teleread,
Paul Biba quoted Scott Pendergrast as saying that B&N supports
Fictionwise's philosophy of "platform neutrality and eReader
everywhere." This could "be good news for the ePub standard, which will
be the core format for a reinvented eReader."
In addition, he
wrote, "Of all the major DRM systems, the one in Fictionwise's eReader
software could well be among the gentlest, allowing you to copy a book
to an unlimited number of your own devices--unlike systems from, say,
Mobipocket. Fictionwise DRM uses encrypted credit card numbers as a way
to discourage copying."
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And in what might be considered another part of the B&N-Amazon chess board, Amazon.com made a move by unveiling a service yesterday allowing customers to trade in used videogames for store credit on any Amazon offerings. This initiative is seen by many observers as a major threat to GameStop Corp., which was owned by B&N chairman Len Riggio and B&N before its IPO. He remains a director and chair of the executive committee.
Yesterday GameStop shares dropped 14%.