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Wait… Microsoft Corporation (MSFT) Should Buy Barnes (BKS) & Noble?

Speculation is rising around how Barnes & Noble is going to shake up its retail operations. Last week, the company announced its plan to evaluate the sale of its retail operations to the company’s founder and chairman of the board, Leonard Riggio, who just so happens to the be the company’s largest shareholder. Then we had Barron’s running a weekend story about how Microsoft Corporation (NASDAQ:MSFT) may be a great suitor for Barnes and Noble (NYSE:BKS)’s retail operations, as it would jump-start Microsoft Corporation (NASDAQ:MSFT)’s own retail operations; the company is dying to sell more Surface tablets. Team Redmond already made a $300 million investment for 16.8% of Barnes & Noble, so why not just go for the whole thing? Well, for one, since when is Microsoft Corporation (NASDAQ:MSFT) in the bookstore business?

Microsoft Corporation (NASDAQ:MSFT)Lack of experience
Whenever Microsoft seems to stray too far from its core strength of developing software, it doesn’t seem to go well for it. I can think of a $6.2 billion reason why this is probably a bad idea. Although it’s tempting to increase the Surface’s retail footprint by over 1,300 more stores, such an acquisition doesn’t compliment Microsoft Corporation (NASDAQ:MSFT)’s expertise. Moreover, between its retail agreements with Staples, Inc. (NASDAQ:SPLS) and Best Buy Co., Inc. (NYSE:BBY), the Surface already has a network of nearly 3,000 potential stores in the U.S. and Canada. Increasing the retail footprint of the Surface isn’t likely the solution to addressing the Surface’s lack of sales.

Adjust to the realities
Perhaps the Surface family is off to a bit of a sluggish start because the market doesn’t see the great need for a tablet device that charges a premium to the Apple Inc. (NASDAQ:AAPL) iPad (when you include the keyboard). Granted, users can in theory “do more” with a Surface, but that doesn’t necessarily mean they will pay up for a nascent platform that’s largely unproven. The non-Apple tablet market comprises primarily of lower-cost Google Inc (NASDAQ:GOOG) Android options, which therein lays the problem. According to IDC, Microsoft and its partners should “adjust to the realities” of lower prices if it wants to drive increased market share.

Barnes & Nope
The last thing Microsoft Corporation (NASDAQ:MSFT) needs is another one-off distraction away from its core business. Although 95% of Barnes & Noble’s stores are profitable, this deal doesn’t make sense from a strategic perspective. Microsoft’s long-term growth strategy boils down to the trajectory of PC sales and how well it can increase its market share in mobile computing. That said, I’d be more focused on what Nokia Corporation (ADR) (NYSE:NOK) is doing to kill Android’s dominance in emerging markets.

The article Wait… Microsoft Should Buy Barnes & Noble? originally appeared on and is written by Steve Heller.

Fool contributor Steve Heller owns shares of Apple and Google. The Motley Fool recommends Apple and Google. The Motley Fool owns shares of Apple, Google, Microsoft, and Staples.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

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