6 ideas For How The Microsoft and Barnes & Noble Strategic E-Reading Announcement Can Be The Next Revolution In Multichannel Profitability Rather Than A Simple Apple iBook Reaction

This morning Microsoft and Barnes and Noble made an announcement that they are launching a strategic business partnership to focus on their digital reading experience business (http://www.barnesandnobleinc.com/press_releases/4_30_12_bn_microsoft_strategic_partnership.html). This will form a new business subsidiary that will incorporate the NOOK® Digital and College businesses.

With Microsoft investing $300m will this be a simple reaction to Apple iBooks or is there an opportunity to do much more.

Open disclosure – I am a huge Apple iBooks fan but also a huge Barnes & Noble fan although like most B&N customers I don’t seem to find a reason to make it into the store more than once every other month these days.

My local Barnes & Noble stores here in Atlanta bring together three key “loyalty features” for me:

1. A place where other “readers” hang out and classify themselves by location – some days I think there are an ever decreasing number of people who actually read. I have met a number of people who are interested in political history and fly fishing (uugh boring I hear you say!) because that is the aisle they stand in when I bump into them.
2. The 3 local stores all have a Starbucks attached which makes them a great place for business meetings  (especially with the free internet access)
3. One of the B&N’s is also college based which occasionally allows me to hang out where the college students hang out and feel cool (hey it is a personal thing!)

But it is pretty clear that the online business in general and iBooks in particular is doing some serious damage to the bricks and mortar book retail business (ask the folks at “Borders”).

But B&N’s real estate locations are incredibly valuable and people always want to meet up with people face to face no matter how internet and social media savvy we get. I am convinced you can make a lot of money if you handle it right. Starbucks became the small and independent business gathering spot of choice around here 10 years ago and I suspect has sold billions of dollars of coffee because of that simple fact of work at home business people needing somewhere to hang out.

So how could Microsoft and Barnes & Noble leverage this digital partnership and the Barnes and Nobles store locations and multichannel techniques and technologies to gain competitive advantage and make a little money:

1. Use social media to drive physical community building – bringing online social media based communities and physical communities together is still in its infancy. Meetup.com is making some great strides but the Barnes and Noble stores and reader community and Microsoft’s software expertise provide a unique opportunity to build an online reader based social media communities (“Suzanne Collins fans of the world unite”, “the international society of students of the psychology of greek history” etc) and then make the store locations local community meeting places of preference in the future.
2. Leverage the stores as ongoing education sites combined with the interactive books and earning curricula. How about locations for group learning sessions for online education. Tablets are revolutionizing textbooks and online learning and there has been a steady and dramatic growth in “continuing adult education” represented by organizations like University of Phoenix and others plus the future is going to be a world of continuing learning just to stay employed.  Barnes and Noble and Microsoft could partner with local, state and federal government to utilize their great real estate locations as training and education centers. Maybe Microsoft launches mentoring training centers or provides tech support in them which would guarantee the costs were covered.
3. Inject video collaboration technologies in the stores to link communities – there are whole host of opportunities to provide high end video facilities for events from media launches (books, music, software etc) to society events to small business video conferences. Hey if my local movie theater does it then Barnes and Noble should be able to.
4. Contract with a company like Amazon to provide local real estate for item returns etc.
5. Contract with local authorities to provide library services more effectively than they can on their own.

What do you think ?  Between all of us I am sure we can help these goliaths think through how to save the local bookstore and invent a new high productivity business model with a little innovative thinking ?