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B&N buys portal stake
November 2, 1999: 10:24 a.m. ET

Bookseller acquires 49% of publishing portal
By Staff Writer Michele Masterson
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NEW YORK (CNNfn) Barnes & Noble Inc. said Tuesday it has taken a 49 percent ownership interest in self-publishing portal,, of San Jose, Calif. enables published and new authors editorial services, marketing, distribution and print-on-demand services. The portal's distribution capabilities include retail and online, channels. Authors working with the company can also make their books available for free viewing online and for sale through electronic download formats. Authors of electronic books, or eBooks, receive a 50 percent royalty.
     The company promises new writers that their work will be published within a month. For out-of-print authors, the portal offers a chance for their books to be available again.
     "This investment is about giving authors with small voices the loudspeakers they need to get their works published and distributed throughout the world," said Steve Riggio, vice chairman of Barnes & Noble Inc. (BKS)
     Starting Nov. 22, 500 Barnes & Noble stores will feature displays and books from iUniverse. In addition, titles will be sold on the Web site. The portal has alliances with other publishers such as Authors Guild, Writer's Digest and Ingram Books.
     Writers can publish their works after submitting manuscripts to the portal and a fee that ranges from free for out-of-print works to $99 for new submissions. The company said that within a matter of weeks the complete book is viewable online at its Web site and can be printed into an actual book on demand.
     "We now have the capacity to publish 2,000 titles a month, and by next year we'll publish tens of thousands of titles, making us one of the world's largest publishers," said Richard Tam, founder and chief executive officer of
     Barnes & Noble canceled its proposed acquisition of book distributor Ingram Book Group last June. The purchase had been under review by the Federal Trade Commission (FTC) and had met with criticism by independent booksellers trying to stay alive in a market dominated by the retailer's superstores.
     In May, the bookseller took its Web site, (BNBN), public in an IPO at $18 per share, raising approximately $421.6 million.
     Book retailing watchers were particularly interested in Tuesday's news.
     "Barnes & Noble has been doing its own publishing with its own imprint for a few years now, reprinting classics for lower prices," said John Mutter, executive editor of book selling for industry magazine Publishers Weekly. "When they were interested in buying Ingram, it wasn't just their warehouses they were looking at, but also their Lightning Print program, which is publishing on demand."
     "They're worried about publishing and retailing like everyone else in the business, and this may be a way for them to stay on top of this," Mutter said.
     Ken Cassar, an e-commerce analyst with Jupiter Communications , sees the partnership more as a publishing initiative than an Internet deal.
     "It's not necessarily a play, but seems like an effort to get into publishing," Cassar said.
     "What's really interesting is that most online retailers have forward integration, whereas this seems like a backwards integration play. Barnes & Noble already has a direct relationship with the customer and now they're trying to get further into the supply chain," Cassar said.
     "This is the opposite of the recent Levi online situation. Levi was seen as cutting out its retail partners to get to their customers directly online," Cassar said. Back to top

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