Is Kindle Hurting Barnes & Noble’s Web Sales?

Even before he launched the new TBM series "The Kindle Chronicles," TBM contributor Marion Maneker took note of the way that consumer book-buying habits are changing:

Think of it this way: Borders (BGP) and Barnes & Noble (BKS) pay lots of rent on large stores filled with backlist books in the hope that the cornucopia of titles will attract you to them. But, in truth, you go there to read magazines, drink coffee, and loaf. You're not buying many of those backlist books when you're there.

Reduced foot traffic in those stores is one reason why Barnes & Noble—the largest U.S. bookstore chain by revenue—yesterday announced a first-quarter loss of $2.69 million. Lots of brick-and-mortar retailers are having that problem. But something else is going on, too. Online sales at barnesandnoble.com for the first quarter were $93 million, down 7 percent from the first quarter in 2008.

This has to be very troubling to B&N. Its online sales have been more or less flat for years, falling from 2005 to 2006, jumping a bit in 2007, only to fall again in 2008. Granted, first quarters are almost always weaker than fourth, so you can't extrapolate too much from yesterday's number, but to begin the year with under $100 million is not a good sign.

Could the Kindle be a culprit? It's a hard question to answer definitively. There's good reason to think that anyone who's bought a Kindle was probably already a more loyal Amazon (AMZN) than B&N customer anyway. Still, there were obviously some customers who used both. Once you've invested in a Kindle, it's very hard to see why you'd go back to BN.com.

I, for example, am a Kindle owner. So if I wanted to buy Darryl Strawberry's new autobiography Straw: Finding My Way, I could go to BN.com, pay $19.43 for it, plus tax and postage and handling, and wait for it to show up in my mailbox. Or I could go to Amazon, pay $10, and have it on my Kindle in a couple of minutes. Which would you do?

It's hard to imagine that this doesn't have something to do with declining sales at BN.com. The question is how much.