Barnes & Noble wins auction for intellectual property{Comments Off on Barnes & Noble wins auction for intellectual property}


by David G
Summary:

In a $14 million dollar auction deal Barnes & Noble has acquired the intellectual property of the bankrupt Borders. This includes their database with information of over 48 million customers including their names, addresses, phone numbers, and e-mails. This information is from Borders’ customer loyalty database. However the privacy of this information has caused it to end up in court and both sides have agreed on a settlement. Borders has agreed to e-mail all of their customers and give them a 15 day opt-out option in which they could choose not to have Barnes & Noble possess their information. Both sides have also agreed to take out an ad on the USA Today newspaper informing customers of this buyout and their right to opt-out. Both sides have battled in court over the consent of each of their customers before acquiring this information. Barnes & Noble believes their privacy standards are sufficient enough to protect Borders’ loyal customers.

Reflection:

This is a case where one company went bankrupt and another seized the opportunity to buy their intellectual information including their databases in order to use it to market to a wider range of customers. To me this is a smart move for Barnes & Noble. If you think about the 48 million customers and the fact that each one at one point or another had purchased some sort of reading material or media from Borders then you realize these are all potential customers. You all ready have good leads and now you can market your product to them which is similar to what Borders offered. Imagine 10 percent of those 48 million customers bought  just one book or item at 10 dollars then you have made 48 million dollars minus costs. That is huge. If I was a competitor in the book business I would feel a bit threatened by the power of a customer database. I know that most of these customers might opt out but just imagine at least have or more might stay and transfer on as Barnes & Noble customers. To me this is an excellent acquisition on top of other information which they will also now own.

As far as privacy is concerned, both sides seem to have agreed on negotiable terms. Personally I don’t really read most of my e-mails from online vendors. I usually just delete them. I bet that is what Barnes & Noble hopes most of Borders’ previous customers have done. I know that since Borders customer privacy was done by some third party ombudsman, it caused problems. My guess is that the third party wanted some of the action from this auction sale or to be moved on as a facilitator for Barnes & Noble as well. At the end of the day it’s a business and these companies want to make a profit. Think about it like this, if the information wasn’t important than why would they have offered $14 million dollars for it. They at least have to have a plan of doubling that investment.

Citation:

Cooney, Michael. “Borders Customers Will Have to Opt Out After Barnes & Noble Acquires Database | PCWorld.” Reviews and News on Tech Products, Software and Downloads | PCWorld. 27 Sept. 2011. Web. 16 Oct. 2011. <http://www.pcworld.com/article/240708/borders_customers_will_have_to_opt_out_after_barnes_and_noble_acquires_database.html>