Borders CEO nixes idea of own e-reader

NEW YORK Fri Dec 18, 2009 4:46pm EST

A view of the new Borders superstore which includes computers and movie screens in Pittsburgh Township, Michigan February 13, 2008. REUTERS/Rebecca Cook

A view of the new Borders superstore which includes computers and movie screens in Pittsburgh Township, Michigan February 13, 2008.

Credit: Reuters/Rebecca Cook

NEW YORK (Reuters) - Borders Group Inc does not plan to develop its own electronic book reader because of the cost and time it takes to do so, its chief executive said on Friday.

Earlier this week, Borders announced a deal with electronic download service Kobo Inc, a spin-off of Canadian bookseller Indigo Books & Music Inc, that would provide Borders with e-book sales services by June 2010. Borders holds a 20 percent stake in Kobo.

"I don't anticipate us doing our own e-reader for a whole variety of reasons, not least of which is that we're not a technology company. We're booksellers," Borders Chief Executive Ron Marshall told Reuters in an interview.

"We could have gone out and tried to develop it on our own, and spend a good deal of money and many months putting this thing together," he said.

Borders, the No. 2 U.S. bookseller, has been faulted by analysts and investors for coming late to the e-books market and missing out on potentially large holiday sales this year.

"Getting to market quickly in this field is critical right now -- the window is still open, but it's not going to remain open indefinitely," Marshall said.

Borders had been expected to unveil its e-book strategy after the holidays, but the announcement was moved ahead of January's CES conference hosted by the Consumer Electronics Association.

"A slew" of e-readers will be introduced at the Las Vegas event, Marshall said.

OPEN TO ANY DEVICE

Rival Barnes & Noble Inc launched its "Nook" reader ahead of the holidays, though it has been unable to ship many of the devices already ordered in time for Christmas. Online retailer Amazon.com Inc's Kindle has established itself as the market leader.

Borders' deal with Kobo will allow shoppers to download e-books onto almost all e-readers. It will give Borders' shoppers access to a catalog of 2 million books for sale, and another 1.8 million free books. Kobo will also offer newspapers and magazines for download.

In November, Marshall said any Borders e-books strategy would be "device agnostic" with a view to allowing as many e-book owners as possible to buy books.

Through the Kobo service, users will be able to download books from the borders.com website onto any device such as Barnes & Noble's Nook, Apple Inc's iPhone and Research in Motion Ltd's BlackBerry.

The one exception is the Kindle, whose downloads are not compatible with other e-readers. Currently, Borders sells only Sony Corp's e-readers in its stores.

Marshall recognized that the ability to draw a Nook user to Borders' website rather than Barnes & Noble's site means Borders has to make its website as alluring as possible.

Borders' loyalty program will give it the data need to make personalized suggestions to readers, he said.

With the number of e-readers proliferating, Marshall said an open protocol is necessary to give his company the widest access to book buyers.

"I don't think these e-books are, over time, going to develop as Swiss army knives -- that one device does everything," he said.

Shares of Borders fell 5 cents, or 4.4 percent, to close at $1.08 on the New York Stock Exchange.

(Reporting by Phil Wahba; Editing by Gunna Dickson and Richard Chang)

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