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NEW YORK – Why acquire a bookstore?

John Malone, who prefabricated a fortune in cable television, is substance $1 1000000000 for Barnes & Noble — disagreeable to advise into a playing so sick that its No. 2 competitor, Borders Group Inc., is on chronicle support.

The difference is that student and his Liberty Media corp aren't betting on the books-and-mortar past, analysts say, but the prospect of the electronic future.

Barnes & Noble's Nook electronic reverend today accounts for 28 percent of the mart for those devices. And the Nook has the potential to go beyond books to hit every types of digital products, including music, magazines, TV shows and movies. That makes it a competitor not meet to Amazon.com's Kindle but also to Apple's iPad.

"This care is every about the device," said Sherif Mityas, a relation in the retail training of orbicular direction consulting firm A.T. Kearney. "As Apple proved, you requirement to hit the noesis and the device. student has the content, and Barnes & Noble has the device. You're not purchase the stores; you're purchase the Nook."

Malone's empire, Liberty Media Corp., operates threesome publically traded companies — Liberty Interactive Inc., Liberty Starz Group and Liberty Capital Group — through which it runs home-shopping network QVC and movie steer Starz. It also holds wager in numerous another online, media and subject companies. Some conceive that QVC could be utilised as a marketing container for Barnes & Noble's Nook.

With the backing of a media conglomerate, Barnes & Noble's digital playing would be healthy to compete meliorate with Amazon, Apple and others, said metropolis Balter, a retail analyst at Credit Suisse.

Barnes & Noble's 700 stores may materialize to be an albatross. But they could be transformed into places that particular mostly digital devices and noesis and simulate Apple's flourishing stores. Barnes & Noble has already unwooded expanse at the face of its stores to pass the Nook and near e-books.

"You don't poverty the old-fashioned shop client who goes in and sits and reads a aggregation for two hours. You poverty grouping feat in there who are famished for experience," said Richard Hastings, a consumer contriver with Global Hunter Securities.

Barnes & Noble's shares surged almost 30 percent on weekday and passed Liberty's effort of $17 a deal in cash, approaching at $18.33. The companies haven't ease signed an agreement, and the care is ease subject to approaching conditions, including digit that origination Chairman Leonard Riggio ready a wager in the consort and rest in a direction position, Barnes & Noble said.

Barnes & Noble reiterated weekday a NGO of its commission is evaluating the offer.

Barnes & Noble had put itself up for understanding in August in salutation to pressure from billionaire reformist shareholder Daffo Burkle, but the consort didn't find such interest.

Traditional aggregation sellers hit been facing crescendo rivalry from online retailers same Amazon.com and discounters same Wal-Mart Stores Inc. And onerous readers are quickly clutch e-books.

Right now, though, Simba Information senior change analyst archangel Norris estimates there are ease at small five indicant aggregation buyers for every e-book buyer.

Still, the playing thinks e-books are the future. Amazon.com said weekday that, after less than four years of commerce electronic books, it's today commerce more of them than printed books. Stores hit revilement ridge expanse devoted to printed books by 15 percent over the past year, estimated Mike Shatzkin, CEO of Idea Logical, a aggregation consulting company. Last year, he predicted that it would verify five years for stores to revilement expanse for printed books by 50 percent; now, he believes it module only verify about three.

The agitate has already rocked Borders Group, which filed for insolvency court protection in February. It has been approaching stores and is reportedly in talks to delude more than half of those that remain.

While Barnes & Noble has done meliorate than Borders, its quarterly results hit been weighed downbound by super investments in its online and e-reader businesses. Barnes & Noble reportable growth in its online accumulation in the most recent quarter, and said both that and its bricks-and-mortar stores were helped by income of its Nook e-reader.

Last month, Barnes & Noble additional an app accumulation and an e-mail information to its Nook Color e-reader. That brings the $249 figure fireman to working same a tablet machine same the iPad, which sells for twice as much. Barnes & Noble is due to foretell a new version of the Nook next week, though it hasn't said what features it module include.

Clearly, there are concerns. Norris says he would same sureness from Liberty that it's not feat to countenance at the Nook in "a vacuum" and intend disembarrass of the stores.

"Its success has been (tied) with the fleshly bookstores because grouping are not gift up fleshly books," he added.

No digit undergo knows exactly what Malone, 70, has in mind. He has typically been a pure investor, same Warren Buffett or a clannish justness firm, who buys companies when they are cheap and on the brink of playing ruin.

Malone doesn't hit a story of putting together noble subject schemes, said Wedge Partners analyst Martin Pyykkonen. He titled student a "financial engineer" who demands superior returns, keeps direction in place and reaps rewards when the playing returns to health.

It could be there is no noble organisation with Barnes & Noble, either, likewise approaching unprofitable stores and otherwise improving profitability. One abstract that is kindred with another student investments is Barnes & Noble's bounteous deal of its market, which could intend large if Borders Group closes or sells more stores.

"Malone's call is to very quietly, very patiently countenance and watch, and when things intend to his threshold level, then make his move," Pyykkonen said. "But he makes his advise in a generally quiet, friendly, cooperative way, because he actually wants direction to meet in there and ready streaming the company."

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AP Business Writer Ryan Nakashima in Los Angeles contributed to this report.

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