There's a billion-dollar offer on the table for bookseller Barnes & Noble, mostly thanks to one single item in the store's inventory--the Nook.
Liberty Media Corp.'s Interactive group is driving the offer  to buy Barnes & Noble. These are the folks behind QVC, so they've got all the cash and media cred to back that up. The purchase would happen at a price of $17 per share, valuing the company at over $1 billion--not bad for a company that put itself up for sale last year in a desperate bid to save its business, at a time when its share price was around $15.
B&N's move in August 2010 was driven by slipping print sales in its 720 bricks-and-mortar stores and college book outlets. Rising online sales, changing reading habits, and the arrival of the e-book all contributed to the shift (which was confirmed this week when online bookseller Amazon said e-book sales have outpaced printed versions ). Luckily, B&N had the foresight to bite the electronic bullet, and in 2009 launched the Nook e-reader with a color Android second window, fit to steal the limelight from Amazon's plainer Kindle. A year later, B&N took a bigger risk, adopting a full-screen LCD model for the Nook Color.
The Nook Color, attractively priced at $250, was one of the first 7-inch Android tablet PCs. Because its e-reader-centric UI could be easily tweaked  to become a more full-featured Android tablet, the Nook won over a new audience. B&N carefully embraced the idea, forming a limited-access app store. Last week, the company revealed it had one million  app downloads in the first week. With the Nook, B&N quickly captured some 20% of the e-book market share, which has carried its physical book division, and has since expanded  that share to around 28%.
Analysts are reacting  to the deal with cautious optimism, most of them citing positive sales results and forward-looking hopes for the Nook. It's tempting to see the news as evidence that the e-book really is the future of reading--people do still want to consume books, just in a different format. While the valuation isn't of the same extraordinary scale as LinkedIn  achieved in its IPO, it is a reasonable multiple of around six times the firm's earnings. Books are dead; long live books.
[Image: Flickr user kjarrett ]