Barnes & Noble Shows Bertelsmann the Money

Jul 30, 2003

By George Anderson

Reuters reports Barnes & Noble has agreed to pay $164 million to acquire Bertelsmann AG’s share of

Bertelsmann sells its stake at a time when the dot-com venture appears to be on the verge of turning a profit. According to the company it will “produce positive cash flow in the fourth quarter, as well as for 2004.”

Despite strong competition from Amazon and others, has been improving bottom line results through cost-cutting measures.

Moderator’s Comment: Does Bertelsmann’s timing for
selling its stake in strike you as being odd? Is there room
on the Internet for another major books, music and movies retailer other than

The winner of the attributed statement of the week that
left us asking, “Yeah, so?” goes to Prudential analyst Mark Rowen.

According to Reuters, Mr. Rowen expressed concern about losing market share to in a research note. He
wrote, “It appears to us that’s focus on reaching profitability
may have caused it to lose momentum to its archrival,” Given the option of gaining
share while losing money or being profitable with a smaller market share, we’ll
take the latter.
Anderson – Moderator

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