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In the publishing world, it's a mad scramble to get a piece of the e-book market. While the dominant player is Amazon.com (AMZN), there are other strong offerings from operators like Barnes & Noble (BKS) and Sony (SNE).But one of the companies left out has been Borders (BGP) . Then again, the company's fortunes have been ailing over the past few years.
However, this week Borders said it actually has an e-book strategy. That is, the company has agreed to invest in Kobo as well as form an alliance. The financing round came to $16 million and also included Instant Fame and REDgroup Retail.
Kobo is a spin-off of Indigo Books & Music and currently operates a digital book download service. The platform has comprehensive support for smartphones and eReaders. So far, there have been more than one million downloads of eReading apps (since February 2009).
With its latest financing, Kobo expects to expand its digital catalog to more than two million books. By Q2, the Kobo service is expected to be integrated into Borders online platform. And, there should be some immediate traction. Keep in mind that the company has 35 million rewards loyalty members.
What's more, Kobo plans to launch a digital reading device sometime next year. Although, the details are fairly sketchy.
All in all, Borders had little choice. No doubt, the book market is going through wrenching change because of digital technologies. So, making an investment in an ebook specialist looks like a smart move.
Tom Taulli advises on business tax preparation and resolving tax problems. He is also the author of a variety of books, including the including The Complete M&A Handbook
. His website is at Taulli.com.
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