Leonard Riggio, Barnes & Noble's founder and chairman.

Earlier this week, news leaked that Barnes & Noble’s founder and current chairman, Leonard Riggio, was interested in buying the physical bookstore part of the business. The move would completely separate the bookstores from the Nook media division (which includes Nook devices, eBooks, and the college bookstore parts of the business). If this happened, the Nook media portion would likely remain a publicly traded company, while the physical bookstores would become a private entity.

Now, some people have expressed that they feel I’m too hard on Barnes & Noble, but please understand, I love books and bookstores. It is not Barnes & Noble that I have a problem with, it’s their management. Specifically, I have a problem with their chairman, Len Riggio. See, as chairman, he works for the shareholders of the company. His job is to create value for the shareholders. He doesn’t seem to get that; everything he does seems predicated on what will benefit him the most. (Riggio is the largest shareholder of the company, owning just over 30% of shares.)

Investor Ronald Burkle—Maybe we'll see a new takeover bid from him?

This is not the first time a takeover has been discussed. Back in 2008, Ron Burkle and his Yucaipa Companies started accumulating shares of B&N. In 2010, Burkle began accumulating more shares in an attempt to buy Barnes & Noble. Riggio had a new shareholders’ agreement written, and enacted a poison pill to block Burkle (or anyone else) from acquiring more than 20% of the company (a strategy used by many closely-controlled companies). Riggio’s stated reason for blocking Burkle’s takeover was that Burkle was trying to buy the company for less than it was worth.

Flash forward to today, and we find Mr. Riggio reportedly talking about buying the company himself. Back when Burkle was acquiring shares of B&N, it was trading just below $19 a share. Today, when Riggio is talking of buying B&N, shares are trading even lower, potentially allowing Mr. Riggio to buy the company for even less than Burkle could have. For that matter, in 2011, Liberty Media bought 17% of B&N and had offered to buy the whole company for $17 a share. Riggio refused their offer. Friday, shares of Barnes & Noble closed at $15.63.

In this weeks Barron’s, published today, Andrew Bary writes on the subject of Len Riggio’s proposed buyout of Barnes & Noble. He opens his article by suggesting that the message to the board of directors should be: “Don’t let Leonard Riggio steal the retail business.” Bary argues that B&N’s retail unit could be worth $19 a share or more, and that if a partner like Microsoft—which owns 16.8% of the Nook media unit—were to bid on B&N, they could pay upwards of $25 a share.

The future of the B&N bookstore business can be put aside. What matters right now is this deal, and what it means for shareholders. Any final deal should be in the best interest of shareholders. If Riggio puts together an offer that is fair to shareholders, then Riggio should be allowed to buy the company. If he can’t, or is someone else makes a better offer, the board owes it to the shareholders to decline the founder’s offer. That is what the board is elected to do.

“This agreement will put the Postal Service on the cutting edge of functional fashion,” Steven Mills, a USPS licensing manager said in a statement. “The main focus will be to produce Rain Heat & Snow apparel and accessories using technology to create ‘smart apparel’—also known as wearable electronics.”

Upon hearing this news, one case study came immediately to mind.

On my desk sits a sock puppet from the defunct pets.com, along with a printout of their stock’s performance. Pets.com was one of the poster children of the ’90s dot-com bubble. It sold pet food, toys, and accessories to retail customers via its Web site. It began operations in August 1998 and had an initial public offering (IPO) in February of 2000. Pets.com closed its doors for good in November of 2000.

The pets.com sock puppet and stock chart that decorates my desk.

Pets.com’s biggest asset seemed to be their sock puppet mascot (in bankruptcy, the rights to the sock puppet were sold to Hakan and Associates and Bar None, Inc. for $125,000). The sock puppet was even made into a balloon for the 1999 Macy’s Thanksgiving Day Parade. The pets.com IPO was priced at $11 per share, and the stock went as high as $14 per share, before sliding lower and lower of several months, finally to a low of 22 cents a share. Several factors contributed to this decline. For one, competition. At the time, there were three other major dot-com sites selling pet food and supplies. Shipping costs were also eating into profits (ever ship a 50 pound bag of dog food?). Related to that, they probably didn’t raise enough capital in their IPO to support their business model.

During its decline, pets.com’s CEO, Julie Wainwright, decided to start selling memorabilia featuring their iconic mascot, including the sock puppet which now adorns my desk. (As an aside, I purchased my sock puppet after the bankruptcy of pets.com at a department store, on clearance, for $4.98. They once retailed for $20.) It’s probably not shocking to learn that the new line of merchandise did not save the company. It didn’t even help extend the company’s life a little bit. Why not? Probably because pets.com was not a retailer of superfluousness, kitschy knick-knacks. It’s customer base used pets.com for pet supplies, not sock puppets and plush toys.

This brings me back to the USPS. As customers of the USPS, we expect them to deliver our mail and packages, not grace the runways of Paris and Milan. I will be shocked, completely shocked, if the “Rain Heat & Snow” clothing line does anything but hurt the USPS. Details of this deal are scarce as of now, so we don’t know if the USPS is simply licensing the motto, or if they will have to spend any money on the marketing of the new line. Let’s hope it’s purely a licensing deal, because as a business, when you’re operating in the red is exactly the wrong time to develop, produce, and market a new product that is way outside your regular business.

I got my first job in 1994, at the age of sixteen. It was in the warehouse of a moving and storage company. Being an entry-level labor job, it paid minimum wage, which was $4.25 an hour at the time. It was a decent job and I really liked the people I worked with. That being the case, if I decided today—nineteen years later—that I would like to return to that job, I could now earn $7.25 an hour. (Actually, because I live in Colorado, which offers a slightly higher minimum wage than the Federal rate, I would make $7.78 an hour; Colorado’s minimum wage is also tied to the cost of living.)

If I do the math, I see that (at the Federal rate) I’d be making $3 more an hour than I did when I worked there almost two decades ago. That’s an increase of only fifteen cents a year. Actually, this is quite an improvement since there was no increase in the Federal minimum wage in the ten year stretch from September 1997 to July 2007. In 1997, the Federal minimum wage was raised to $5.15. Ten years later, it was raised again to $5.85; an increase of less than 15% over a decade. Meanwhile, during that same period, the price of a dozen eggs rose 57% and the price of a gallon of gas rose by 145%. In fact, if we adjust for inflation, the real value of the 1997 minimum wage increase was fully eroded. When adjusted for inflation, the new Federal minimum is still less than the minimum wage throughout most of the period from 1961 to 1981.

In 2008, the minimum wage was again raised to $6.55, then in 2009, it was raised to $7.25 an hour, where it remains today. According to the U.S. Bureau of Labor Statistics, 73.9 million American workers age 16 and over were paid hourly in 2011—that accounts for 59% of all American workers. The bottom percentile of those hourly wage earners, nearly 3.8 million workers, earned only the Federal minimum wage of $7.25 per hour, or in some cases, less.*

Who are these minimum wage earners? Well, they are usually young. Workers under the age of 25 represent about half of all of those paid minimum wage. About 11% have less than a high school diploma, compared to 5% of those who have a high school diploma but no college education. Still, 2% of college graduates earn minimum wage.

Why should we raise the minimum wage?
Opponents of a higher minimum wage argue that increasing in the minimum wage forces employers to stop hiring, cut jobs, and to seek cheaper labor elsewhere. Companies often make the threat that they’ll move operations to other countries. However, they rarely do for one reason: Moving their operations to another location costs them money, too.

Today, 19 states and the District of Columbia have a minimum wage that is higher than the Federal minimum wage and there is no evidence of jobs lost in these states due to a higher minimum wage. In fact, a 2011 study by the Chicago Federal Reserve found that for every dollar increase in the pay of a worker earning minimum wage resulted in $2,800 in new consumer spending from that worker’s household over the year.

Another argument against raising the minimum wage is that when wages go up, so does the cost of everything else. While a business owner may raise prices in order to maintain profit margins, it is by no means an absolute. Additionally, the argument can be made that we as taxpayers are already paying to fill the void between what low-wage earners make now and what they need to make in order to live above the poverty line. Perhaps the most well-publicized example being that of Walmart. Many current and former Walmart employees have stated that their bosses encouraged them to apply for state welfare programs, sometimes even helping them fill out the forms.

Labor costs are a cost of doing business. When viewing labor costs as a line item on a balance sheet, it’s all to easy to forget that there are human workers behind those figures. And if a company can’t hire new workers (or must layoff current workers) because of a $1.75 per hour increase in minimum pay requirements, then it’s quite possible that said company is not financially sound enough to be hiring in the first place. If these companies in question are teetering that close to financial ruin, any change in economic conditions could bankrupt them. Higher fuel costs, an increase in the cost of supplies, less spending by their customers, etc. It’s irresponsible to suggest that paying workers a wage they can live on will somehow be the death of American business.

What if it were you?
It can be easy to take a cursory scan these figures and view them as nothing more than more boring statistics published by yet another governmental agency. However, imagine for a moment that you’re a minimum wage earner. Picture yourself working one of these minimum wage jobs: You put in hours of boring, monotonousness work every day. Maybe your task is performing the proverbial flipping of burgers, or maybe it’s something more labor-intensive like digging up sod for a landscaping company. Either way, for every hour you spend doing your task, you are paid $7.25. However, after tax and Social Security withholdings, you take home about $6 for every hour you work. If you’re lucky enough to find a job where you can work a full 40 hours a week (many employers that pay minimum wage restrict workers to less than 40 hours in order to ensure they do not have to pay overtime), you’ll take home about $960 a month after taxes.

As a minimum wage earner, you’ve managed to find a tiny apartment that is affordable. The neighborhood leaves a lot to be desired and there are some pretty significant problems with insects getting into your belongings, but at least it’s located within walking distance of a bus stop. You’ll be using the bus a lot since the costs associated with owning and insuring a car are far too high for you to afford right now. However, a monthly pass for public transportation can easily cost $80 or more in a larger city, so it’s still going to cost you a good chunk of a paycheck to get around town.

Rent for your small apartment is only $400 a month, cheap by most standards. However, put into context, that’s more than 40% of your monthly earnings. Another way of looking at it is that you’ll have to work for work for 67 hours in order to earn that $400. You also must hope that you do not get sick or injured, as missing even one or two shifts could prevent you from being able to pay rent.

After making rent, you’ll still need to feed yourself. You’ll no doubt learn to shop for bargains at the supermarket, but even if you stick to store brands and use coupons, you’ll probably spend around $80 a month.That may not sound too bad, but $80 translates into over 13 hours of working your job. Occasionally, you’ll want a treat. Say you stop after work to get a combo meal at your favorite fast food establishment. At $6, you’ll have to work one hour to enjoy that hamburger and fries. For a bigger treat, you may want to go to a full service restaurant. Dinner, a soda, and a tip will easily cost $14, or over two hours of work.

What will you do for fun and entertainment? You soon discover that sitting around your small apartment gets old fast, and with cable television costing at least $50 a month, you don’t have cable and the free channels you receive do not offer a lot of options. If you want to catch a new release movie, you’re going to shell out about $10, which is 1.5 hours of work. Buy a movie ticket, small popcorn, and a small drink and you’ve easily spent $18, or 3 hours of work. Three hours of work to enjoy a 90 minute movie!

You can see that living alone on minimum wage is difficult. But what if you have a family to support? You’ll need a bigger, and more expensive apartment. Your food costs will be much higher, too. But what about life beyond the day-to-day costs? Recent statistics show that the average cost of raising a child from birth to age eighteen is over $200,000. Even if both parents are working minimum wage jobs, that’s only about $1,900 a month for the entire household. And with both parents working, childcare will be necessary. For most working families, a daycare or traditional babysitter is the second largest expense just after housing—with an average monthly cost of at least $300 in the least expensive markets and as much as $650 in large cities.

A reality for working families.
This is reality for millions of Americans. While we see people gaming the welfare and unemployment system, and while we see panhandlers on corners who are probably not as down and out as their cardboard signs profess, there are millions of Americans who work hard every day earning the minimum wage. No, a raise of $1.75 an hour isn’t going to magically fix all their money problems, but it will at least help. Evidence of an increase hurting the economy is lacking, while indications of it improving our economy are strong. It is time that we give those willing to work a chance to earn a living wage.

Yes, my tongue was firmly planted in my cheek as I wrote that.

Frankly, 46 cents still seems like a pretty good deal. For that bit of pocket change, a Federal employee will take my letter to any address in the United States. All I have to do is buy a stamp, walk to the mailbox, and drop it in. Not a bad deal! It is a bit curious that people happily handover $5 for a coffee drink, yet balk at 46 cents to mail a letter to grandma. Jokes aside though, the United States Postal Service (USPS) does have some serious problems.

Chief among its problems is that it is hemorrhaging cash. For the most recent year, 2012, the USPS reported a loss of $15.9 billion. Compare that to 2011 when they lost around $5 billion.

Why the huge difference? Well, the USPS would have lost over $10 billion in 2011 if Congress hadn’t allowed the USPS to postpone a required annual payment into a fund for future retiree health benefits.

In 1970, Congress changed the postal system from a Cabinet department to an independent government enterprise. The idea behind this was that it would free the USPS from political restraints and allow it to operate more like a regular business. Congress enacted the Postal Accountability and Enhancement Act (PAEA), which was intended to set the rates for our mail system.

But as usually happens in these situations, our elected officials ultimately decided that they couldn’t keep their noses out of the USPS’ business. In 2006, Congress made changes to the act, giving government, you guessed it, more power over the USPS. Armed with this new power, Congress decided that the USPS should be required to pre-fund its pension plan for a full 75 years ahead. This is a requirement that no other institution, public or private, has. In July this year, an analysis of this practice showed that, without the funding requirements, the USPS would not only be out of debt, but it would actually have a $1.5 billion surplus. Since 2006, Congressional Republicans have continually pushed to downsize the USPS, and they have blocked any attempts to make changes to PAEA to elemental the requirement to pre-fund pension plans for three-quarters of a century.

As it is now, the USPS loses an estimated $25 million per day, so yesterday, the USPS announced that it will end Saturday delivery of letters, an idea that has been tossed around for months. It is important to point out here that this cut only applies to the delivery of letters (and, um, junkmail). Packages, Priority Mail, and Express Mail will still be delivered on Saturdays.

Overall, the average postal customer probably doesn’t really care if the mail comes on Saturday or not. It will be felt the most by customers in rural areas—where high speed Internet access is less prevalent—and people rely more on a postal system.

Also, switching to a five day workweek will definitely mean job cuts for the agency with more than 500,000 employees. And those jobs lost will come at a time when this country is already struggling with one of the highest unemployment rates in recent history.

Despite our government’s involvement in the USPS, the USPS does not receive funding from Congress. It is a business. And like most businesses in the current economic climate, it is facing some real business problems. It’s undeniable that near the top of that list is their labor costs, which account for 80% of their operating budget. Compare that to UPS’ 53% and FedEx’s 32%. However, it seems all too easy to pin all of the USPS’ problems on their workforce or the unions. And while Congress’ heavy hand is not helping in any way, there is another pressing business problem that every business must deal with: Competition.

The USPS has long straddled the line between operating like a private business entity while being a governmental agency. This is mostly due to the fact that the Constitution specifically authorizes the Federal government to “establish post offices” (Article I, Section 8). Meanwhile, non-governmental companies like UPS, FedEx, and DHL have been doing the same thing the USPS does, only in most cases, they have done it better. Yes, they are usually more expensive to ship with, but they are also often worth the extra cost. Have you ever shipped a package with the USPS and paid extra for their tracking number? It’s not pretty. If you look up the tracking data online, typically nothing is reported until well after the package has been delivered…which is often several days after their estimated delivery date. Conversely, ship something UPS or FedEx, and you’ll know where your package is every step of the way. Both companies also offer great smartphone apps so you can track even when you’re not near a computer. If the USPS is going to stay in business, they are going to need to, at the least, catch up to the competition.

That said, the USPS has made a great move with flat rate shipping prices for their Priority Mail service. It’s a simple concept summarized nicely by the smart, registered trademark of “If it fits, it ships.” The brilliance is that they provide you with free boxes and envelopes, charge you one price to ship what ever you can fit in there, and they’ll even pick it up at your door. You can also ship from convenient automated postal machines in locations around most towns. It’s a great idea, and very convenient for customers. But, are they making any money doing it? Given the dire cash flow projections, it doesn’t seem that they are. And that is a huge business problem!

This leads to another problem for the USPS: its public perception. Recently, the USPS launched a new ad campaign touting all they do for us. And last year, they had an ad campaign aimed at business owners which suggested that customers of businesses will be happier and, somehow, safer if businesses mail them a paper invoice for their purchases. It’s a decent sentiment, however, as a consumer, I don’t want more paperwork on my desk. If I get a paper invoice from someone, most of the time it goes straight to the shredder. On the other side of that, as a business owner, I do not want the extra expense of mailing an invoice to a customer who didn’t specifically request it. That’s a waste of money, and show me a business that wastes money on unnecessary items like that and I’ll show you a business that is not very financially healthy. Speaking of that, I wonder how much the USPS wasted on that ad campaign … But I digress.

I think that the elimination of Saturday delivery is a good first step, but it won’t fix all that’s broken with the USPS. All of us need to write our members of Congress and urge them to ease the pension funding requirements. That alone will help the USPS in a big way. But we can’t fix all of their problems for them. The USPS will need to become a better company, and offer a better, more reliable service than what they currently do, something analog to the quality of service provided by their competitors. To compete, they may well have to raise their rates, too. While UPS and FedEx are more expensive than the USPS, both UPS and FedEx reported profits for 2011 and 2012. They tend to offer a much more reliable service as well, and therefore, more and more people are dropping the USPS for one of these other shippers. The USPS isn’t dead, and if they start making these improvements, they can be saved.

I say that not knowing if that statement is a good thing or not. The year 2012, at the very least, stands out, though largely because it was filled with so much sorrow. Of course, the phrase on everyone’s lips going into 2013 is “Fiscal Cliff,” but that is just one story in a very eventful year.

I think the thing that I, and probably the majority of Americans, will remember most from this year is the horrific day of December 14th. That Friday, a twenty-year-old by the name of Adam Lanza forced his way into Sandy Hook Elementary School in the tiny village of Sandy Hook, in the town of Newtown, Connecticut, and violently murdered twenty children and six adults. He also killed his mother and later took his own life. We may never know why he did this, but we do know that we are all shocked and horrified, and that some things have changed in this country. Be it tougher gun laws, gun bans, armed guards or teachers in our schools, changes are coming. We will have to wait to see—over the course of 2013—which changes we as a country will chose. No matter what, changes are coming in this country, and the gun debate will now be a prominent, heated issue for the year ahead, as this was but one horrific incident this year fueled by heavily-armed killers.

Just weeks before the Newtown shootings, on December 11th, twenty-two-year-old Jacob Roberts opened fire in the Clackamas Town Center near Happy Valley, Oregon, outside of Portland. He was clad in tactical clothing and a hockey mask, and was armed with a stolen AR-15 assault rifle. He fired as many as 60 rounds, killed two people, and seriously wounding a third person before killing himself.

On August 5th, a white supremacist named Wade Michael Page opened fire on worshipers at a Sikh temple in Oak Creek, Wisconsin, killing six people and wounding four others. The gunman was eventually shot in the stomach by a police officer, and then he fatally shot himself in the head.

Prior to any of these awful events, on July 20th, during a midnight screening of the film The Dark Knight Rises, James Holmes walked into a movie theater in Aurora, Colorado dressed like the Joker. He set off tear gas grenades before firing shots randomly into the crowd. He killed twelve people and injured 58 others.

And while the world did not come to an end in 2012 as some predicted it would, the year did bring us plenty of devastation by Mother Nature. Most notably in the form of so-called Superstorm Sandy. This superstorm began as Hurricane Sandy which devastated portions of the Caribbean, Mid-Atlantic, and Northeastern US in late October. After a brief weakening, Sandy’s strength intensified as she moved ashore near Atlantic City, New Jersey. A total of 24 US states were in some way affected by Sandy. Sandy caused an estimated $63 billion in damage in the United States, destroyed thousands of homes, left millions without electricity, and killed at least 131 people in eight states, making Sandy the deadliest hurricane to hit the US mainland since Hurricane Katrina in 2005.

Throughout the summer, Much of the country was engulfed in flames as wildfires spread rapidly, fueled by record hot temperatures and drought conditions. On a more personal note, my hometown, Colorado Springs, Colorado, was devastated by the Waldo Canyon Fire. The fire caused the evacuation of over 32,000 residents of Colorado Springs, Manitou Springs, and Woodland Park, as well as several small mountain communities along Highway 24. Approximately 346 homes were destroyed. Two residence of Colorado Springs lost their lives. The Waldo Canyon Fire also left its financial mark in 2012 history as being the most expensive fire in Colorado’s history, with insurance claims totaling more than $353 million. It was also the most destructive fire in Colorado history, in terms of structures destroyed.

Like any year, 2012 had a large number of celebrity deaths as well. In 2012, we said goodby to musicians Whitney Houston, Dave Brubeck, Robin Gibb, Donna Summer, Adam Yauch, and Davy Jones. The music world also lost greats like Don Cornelius and Dick Clark. Book lovers said goodbye to Gore Vidal, Ray Bradbury, Nora Ephron, and Stephen Covey. We lost acting greats Andy Griffith, Sherman Hemsley, and Phyllis Diller. As well as painter Thomas Kinkade, journalist Mike Wallace, and politicians Arlen Specter and Daniel Inouye. And the world of science and space exploration lost Neil Armstrong and Sally Ride, the first American woman to fly in space.

And like any year, we had our share of scandals. Though the story emerged in 2011, the Penn State child sex abuse scandal dominated the headlines for much of 2012. It eventually led to the total disgrace of Joe Paterno’s storied football coaching career and the imprisonment of Penn State assistant coach, Jerry Sandusky, who was found guilty on 45 of 48 sexual abuse charges brought against him. On Oct. 8th, the sixty-eight-year-old Sandusky was sentenced to 30 to 60 years in prison. Joe Paterno died early this year, on January 22nd, at the age of eighty-five.

And speaking of disgrace, that brings us to General David Petraeus, whose great military career will likely be overshadowed by the scandal surrounding his extramarital affair with his biographer, Paula Broadwell.

General David Petraeus shakes hands with Paula Broadwell.

Trayvon Martin and George Zimmerman became household names after Trayvon Martin, an unarmed seventeen-year-old, was shot and killed by  Zimmerman, a neighborhood watch coordinator, on February 26th, in Sanford, Florida. The circumstances surrounding Martin’s death, including the initial decision to not charge Zimmerman, raised questions about Florida’s “Stand Your Ground” law. Allegations of racist motivation for both the shooting and police conduct contributed to public demands for Zimmerman’s arrest. Finally, on April 11th, the special prosecutor on the case filed a charge of second degree murder against Zimmerman, who was then arrested. This case is still ongoing and will likely be a prominent news story for 2013.

More tragedy and allegations scandal came to us on September 11th when the US Consulate in Benghazi, Libya, was attacked and consumed by flames. Chris Stevens, the US ambassador to Libya, and three other Americans were killed in the attack.

Politics were front and center for most of 2012, as the presidential election took the lion’s share of media attention. Mitt Romney was chosen as the Republican nominee to challenge President Barack Obama. While the campaign trail, and Romney’s mouth, provided us amusing soundbites such as “binders full of woman,” “I like Big Bird,” and “the trees are the right height,” the race seemed like a close one. However, on Election Day, November 6th, President Barack Obama won in a landslide with 332 electoral votes. He also won the popular vote. Indeed, it was a triumphant night for Democrats across the country, as many Tea Party politicians were voted out of office as well. Election Day also punctuated American’s feelings on another highly debated topic of 2012: gay marriage. Voters in Washington, Maine, and Maryland said yes to measures that allow same-sex marriages. In Minnesota, voters turned back a proposed constitutional amendment that would have prohibited same-sex marriage. It was also a victorious night for those who enjoy the recreational use of marijuana, as it was legalized in Washington and Colorado.

And since 2012 was by no means all doom, gloom, and annoying political ads, I must include that the world watched the 2012 Summer Games, which were held in London. The US took home 104 medals, including 46 gold, 29 silver, and 29 bronze. All of America seemed to catch Gymnastics Fever once again as we watched Gabby Douglas, Jordyn Wieber, Aly Raisman, Kyla Ross, and McKayla Maroney lead the US to medal after medal. Missy Franklin, Ryan Lochte, and Michael Phelps excited viewers of the swimming events, and for about a week, it seemed that we all stopped thinking about all the bad things of this year as we cheered for our athletes.

And finally, 2012 gave us what is perhaps one of the coolest, craziest things my generation has ever witnessed. On October 14th, Austrian skydiver (and daredevil) Felix Baumgartner flew approximately 24 miles into the stratosphere over New Mexico in a helium balloon, before free falling, then parachuting to Earth. The jump lasted approximately ten minutes. Reaching a speed of 834.4 mph—Mach 1.24—Baumgartner broke the sound barrier on his descent, becoming the first human to do so without any form of engine power. Baumgartner also broke the unofficial record for the highest manned balloon flight, and may have broken the record for the highest altitude jump. Baumgartner’s jump was 65 years to the day when Chuck Yeager broke the sound barrier for the first time in a piloted aircraft.

Personally, I had a pretty good year this year. I even got married, in Vegas (yes, it was planned…). But my year was not without its down moments, too. Up to and including the aforementioned Waldo Canyon Fire. Perhaps the bad news events of 2012 stand out more than the good, but this year has seemed more turbulent, overall, than most years in recent memory. We did not end on a good note either. First the shootings in Newtown, and then the “Fiscal Cliff” nonsense that proved to all of us just how useless the 112th Congress actually is. We have no great reason to believe that the 113th will be any better, but we can at least hope. So, as we launch 2013, I want to wish all of you a very Happy New Year! May this year be better for all of us.

The controversy started about six weeks ago when Dan Cathy, the son of Chick-fil-A’s founder and the company’s current president and chief operating officer, told a radio talk show host, “I think we are inviting God’s judgment on our nation when we shake our fist at him and say, ‘We know better than you as to what constitutes a marriage.’ I pray God’s mercy on our generation that has such a prideful, arrogant attitude to think that we have the audacity to define what marriage is about.” Then, two weeks later, the Baptist Press published an interview with Mr. Cathy, in which he said, “We are very much supportive of the family—the biblical definition of the family unit. We are a family-owned business, a family-led business, and we are married to our first wives … We know that it might not be popular with everyone, but thank the Lord, we live in a country where we can share our values and operate on biblical principles.”

Following Cathy’s comments, the Jim Henson Company announced that it was ending their licensing arrangement with Chick-fil-A. Until then, Chick-fil-A had been offering Jim Henson toys in kids’ meals. However, after the Jim Henson Company ended the deal, Chick-fil-A attempted a little spin control, telling customers that the toys had been recalled.

A sign reportedly found in a Plano, Texas Chick-fil-A

Here is the text from a sign reportedly found in a Plano, Texas store:

“We apologize for any inconvenience but as of 7/19/2012 Chick-fil-A has voluntarily recalled all of the Jim Henson’s Creature Shop Puppet Kids Meal Toys due to a possible safety issue. Please be advised that there have not been any cases in which a child has actually been injured, however there have been some reports of children getting their fingers stuck in the holes of the puppets.”

Now That We’re All Caught Up

Let me state that I do not agree with Mr. Cathy, nor do I think he is acting in the best interest of the company he runs, but regardless of my feelings, the man has the right to say what he said. His words may well be ignorant and close-minded, but it is how he feels and he is entitled to say so when asked about it. For those familiar with Chick-fil-A, Mr. Cathy’s stance on this issue shouldn’t be surprising. The Cathy family and the company as a whole have never been shy about their religious beliefs and that they run their company in accordance to those beliefs. For instants, the company has always been closed on Sundays so that their workers can go to church and spend time with their families.

I’ve heard some people say that the media and liberals are making too big of a deal out of this. Sure, if you know much about this company, you’re probably not shocked with Mr. Cathy’s stance on gay marriage. However, I think the reason why this has become such a national story is that there are significant parts of the nation were few or no Chick-fil-A restaurants exist. To people in these parts of the country, they may know nothing about Chick-fil-A or the Cathy family.

It may not be the best business decision for the head of a company to take stances on major political issues. However, Chick-fil-A is a private, closely-held company and therefore, as COO, Mr. Cathy doesn’t have public shareholders to consider. What he should have considered, in my opinion, is the franchise owners in his company. Chick-fil-A does not own it’s 1,600 plus stores; franchisees do. Men and women who have put up tens of thousands of their own dollars to open a Chick-fil-A franchise. These businesspeople may share Mr. Cathy’s views on gay marriage. Then again, they may not. Either way, protestors are forming outside of their restaurants and boycotts threaten the businesses that they have built using considerable time and money, all because of Mr. Cathy.

The truth is, I’m a tad ambivalent about this deal. From a purely business angle, I love this deal! It makes a lot of sense for Microsoft and it gives B&N the cash they need to grow their eBook presence. However, as a book lover, and bookstore lover, I don’t love this deal.

Yes, a $600 million dollar boost of capital is a great thing for most any company. However, in this case, Barnes & Noble is spinning off their eBook, eReader, and tablet business, which is currently contributing greatly to the income of the company as a whole. One of the things that separates Barnes & Noble from the now defunct Borders is their entry into the eBook market. Barnes & Noble came to the party a little late, but Borders was even later and was turned away by the bouncer. While eBook sales are still a small percentage of overall book sales, nook has given B&N a lot more power in the industry, and has improved the company’s cash flow.

With the Microsoft investment, and the new emphases on nook, they are basically drawing attention away from paper book sales. The further problem is that Microsoft’s interest in this deal seems to be less about eBooks and more about entering the tablet market. While there is strategic value for both companies, they seem to have very different goals in mind. I also see the extra emphases on nook as the first step in closing many of their large stores, and the beginning of layoffs.

Furthermore, the amount Microsoft is paying to acquire its 17.6% stake in the eBook division values the eBook/eReader portion of Barnes & Noble at $1.7 billion. Sure, its big business and that’s just another figure, but think of it this way: The $1.7 billion valuation is almost double what Barnes & Noble’s entire market capitalization was at the close of business Friday, before this deal was announced. It’s also more than the entire company has been valued at since 2008.

This deal will reshape B&N’s business in some ways, but by no means do I think Barnes & Noble stores will go away altogether. However, I do think that over the next three to five years, we will see a reduction of their well known big box stores. I can definitely see a move to smaller, boutique stores (maybe in malls) that mostly sell nook and nook accessories, and probably a few paper books such as best sellers and new releases. Picture a small Apple Store with a bookcase in the back where the Genius Bar would be.

Overall, I do think this is a good move for Barnes & Noble. I think it strengthens their position, helps them better compete against Amazon and Apple, and helps them stay viable for a few more years. But all of this comes at a cost, and I believe that the cost is a reduction in stores that sell paper books, a reduction in the selection of paper books, and a reduction in jobs, at least at the store level.

2012 started with news from the now largest bookseller, Barnes & Noble, that they are entertaining the idea of spinning off their eReader device, Nook. Nook is the one thing that has kept Barnes & Noble’s doors open while we watched Borders close all of their stores. The thinking behind it is not necessarily flawed. Barns & Noble wants to attract investors so they can grow and market Nook, but investors are weary of putting money in a company who could just as easily go out of business like Borders did. So, by spinning off the popular Nook (and its accompanying eBook store), you have the chance to attract investors willing to back the nook and eBook business without the attached risk of the “brick and mortar” stores selling paper books.

When I first read that a Nook spinoff was possibly in the works, I thought that by “investors,” the company was talking about larger, corporate type investors, like Liberty Media who last year invested $204 million in Barnes & Noble after a deal to buy the company outright was not reached. But over this Super Bowl weekend, a rumor about a Nook sprinoff emerged that made me wonder just what Barnes & Noble meant by “investors.” The rumor, which Barnes & Noble will not comment on, says that the company is looking into the idea of spinning their Nook business off, not only into a separate company, but into a separate, publicly traded one. I want to make it very clear that this is only a rumor at this point, but there’s something about it that makes a lot of sense, which makes me think that they’re at least considering the idea.

In early 2010, while the full extent of Borders’ struggles were just becoming obvious, billionaire investor Ron Burkle attempted a hostile takeover of Barnes & Noble, citing his feelings that the company was being poorly managed by its Board, and by it’s founder and chairman, Len Riggio. After an expensive proxy battle, Riggio and B&N narrowly avoided a takeover. In the wake of that, Riggio decided to put the company up for sale. Why not just let Burkle buy it? Well, Riggio stated that he thought Burkle was trying to buy the company for much less than it was worth. So Riggio decided to attempt to sell it for a lot more. Problem was, no one else thought the company was worth what Riggio and the Board wanted for it. The best offer came from, of all things, a media company. Liberty Media expressed interest in buying Barns & Noble, but a deal could not be reached, and Liberty instead ended up becoming an investor in the company and now owns a 17% stake.

The Yale Bookstore, a Barnes & Noble College Bookstore

In my opinion, Riggio is and has been looking to get out, and to make some money while doing it. He already made millions off the company years ago when he forced them to buy a chain of college bookstores which he owned (and initially borrowed money from B&N to purchase in the first place). That purchase, which became Barnes & Noble College Bookstores, is what put the company in debt, and started their management and financial problems. Now, with the closing of Borders, and the growth of the eBook market—led by their competitor Amazon.com—it seems that Riggio knows the days are numbered for old fashioned bookstores.

Anyway, I believe that after seeing that he was wrong about his valuation of the company, and after finding out that the only company that was interested at all was a media company, he now realizes that the only thing of value is the digital business.

I can understand wanting to focus on the most profitable part of your business, but it’s starting to look like Riggio and the Board are actively trying to kill off the brick and mortar part of their business. There is no doubt that eBooks are probably the future of the publishing business, but that doesn’t mean that the traditional bookstore is worthless or dead. If Riggio wants out, he should find a buyer for the stores, even if it’s at a lower price than he initially wanted.

Barnes & Noble CEO William Lynch holding the Nook Tablet.

Here’s how I see this playing out: If they spinoff Nook as a publicly traded company, the IPO will raise tens (if not hundreds) of millions of dollars for them to spend on growing and marketing Nook and eBooks for it. Right now, Barnes & Noble sells its Nook devices to stores such as Walmart and Best Buy. Under the new separate Nook company, Nook would likely sell its devices to Barnes & Noble stores as well, treating them just like any other retailer. This means selling the device at wholesale, then allowing the stores to mark up the price. But here’s the problem: right now, Nook is accounting for most of B&N store’s profits because B&N and Nook are the same company. If, as a separate company, Nook sells devices to B&N stores, the stores will only make a very little amount off the device sales. Margins on electronics are tiny. Very tiny.

There’s a bigger problem though. What’s keeping the Barnes & Noble stores afloat is the sales of eBooks and other digital content for Nook. Currently, all of that is sold through bn.com, which is part of Barnes & Noble. In a Nook spinoff, all of that content (and the associated sales), will go to the new Nook company. If you take content sales away from B&N stores, they will not survive. At least not at their current size. The only way they could stay in business would be to move to smaller stores, maybe inside malls, and sell bestsellers, new release, and of course, Nook devices. Maybe even eReader devices from other companies such as Sony, or even Amazon.

Conversely, Nook (the company) would continue to make money mostly from the sale of eBooks, while directly competing with Amazon, Apple, and others for their share of the growing eBook market. Either way, unless eBooks turn out to be nothing more than a bubble, the future of big box bookstores looks bleak. On the upside, maybe we will see the return of intendant bookstores over the next decade or so.

On May 1st, President Obama announced to the world that an Navy SEAL team had killed Osama bin Laden. While it’s somewhat morbid to rejoice in someone’s death, there’s no denying that the death of bin Laden gave many in the world a bit of closure. And just a few months prior, the world witnessed the people of Egypt take to the streets and demand the resignation of their leader, Hosni Mubarak. Mubarak resigned days later. In fact, the protests in Egypt’s Tahrir Square inspired similar protests throughout the Middle East, including a civil war in Libya which resulted in the fall of its government. The spirit of the Arab Spring spread to the US, too as the Occupy Movement took to the streets by the thousands in cities across America, occupying streets and city parks, demanding attention to the income inequality in this country.

Thousands fill the Wisconsin Capitol

However, months before there was an Occupy Movement, tens of thousands of protesters surrounded the Wisconsin Capitol, and later occupied it, in protest of Governor Scott Walker and his attempts to strip unionized workers of their rights. By February 16th, the number of protesters in front of the Wisconsin State Capitol was estimated at 30,000. On February 23rd, Buffalo Beast editor Ian Murphy placed a prank telephone call to Gov. Walker claiming to be Walker’s billionaire supporter, David Koch. Over the course of the 20-minute call, Walker repeatedly admitted to strategies that many considered to be ethics violations. The Society of Professional Journalists condemned the Buffalo Beast, calling its actions “underhanded and unethical”.

2011 also brought us the repeal of US military’s 18-year-old “don’t ask, don’t tell” policy. Now, gay and lesbian service members are allowed to serve openly. Then, on December 15th, the flag used by US forces in Iraq was lowered, marking the end of a war that left 4,500 Americans and 110,000 Iraqis dead at a financial cost of more than $800 billion. On December 18th, the last convoy of heavily armored US troops left Iraq, crossing quietly into Kuwait in the final moments of a nine-year war.

Congresswoman Giffords husband, Mark Kelly, holds her hand as she recovers.

The year did start off on a tragic note, with the attempted assassination of Congresswoman Gabrielle Giffords on January 8th. Six other people were killed that day. Though the story of Congresswoman Giffords turned an otherwise tragic event into one of the best stories of perseverance and determination. By April, her doctors reported that she was making great progress. She was even cleared to travel to Florida to watch her husband, astronaut Mark Kelly, take to space in his final Space Shuttle mission. Then, on August 1st, she made her first public appearance on the House floor to vote in favor of raising the debt limit ceiling.

The spring of 2011 was a difficult one. On March 11th, Japan was hit with a powerful earthquake and a devastating tsunami followed, claiming the lives of nearly 20,000 people. In the US, tornadoes ravaged the southeast. During a four-day period from April 25th to the 28th, more than 200 tornadoes touched down in five states. The deadliest day was April 27th, when 316 people died, mostly in Alabama and Mississippi, from 122 tornadoes. On May 22, Joplin, Missouri was hit by an EF-5 tornado that swept through the heart of the city, destroying over 75% of the town and killing 160 people. The death toll from this year’s tornadoes were so high that they tied for the second highest number on record. By summer, wildfires dominated the weather headlines. The worst was in Arizona, which also saw a number of huge dust storms in the fall.

The economy was still a big part of the news in 2011. Congress debated a new budget, and we almost witnessed a government shutdown in the process. Along with all this bickering came the nation’s first credit downgrade by Standard & Poor’s. The outlook for the American economy is still a bit bleak, as joblessness remains at record highs. But it wasn’t all bad news. The American auto industry made a big comeback in 2011, just two years after being all but left for dead. Record hirings and profits lead the way and officials announced plans to spend $380 million to expand facilities, adding more than 1,200 more jobs by 2013. In fact, all three major US automakers are increasing investment US manufacturing and hiring more workers.

A key point of contention in Washington this year was the extension of the Bush-era tax cuts, an issue that I’m sure will continue to dominate the news in 2012. But it wasn’t just the US economy that struggled in 2011. Toward the end of the year, problems across Europe began pilling up and spinning out of control. In Athens and Rome, a looming recession created panic on world markets. Reports emerging from Brussels said that Germany and France had begun preliminary talks on a break-up of the eurozone, amid fears that Italy would be too big to rescue. Markets around the world wondered what the fate of the Euro was, and currency prices plummeted.

On a lighter note, on April 27th, President Obama released his long form birth certificate, proving once and for all that he was in fact born in the US…well, to most people. Still, some hard right-wingers and conspiracy theorists claim it’s a fake. One thing we can all agree on (I hope) is that on April 29th, Prince William married Kate Middleton in the biggest Royal Wedding since Charles and Diana.

However, on another sad note, Apple founder Steve Jobs died of cancer on October 5th. Not before he brought the world a new iPhone, iPad, and Mac OS X though. His legacy stands and his ideas and creativity have forever changed the way everyone uses technology.‎

Other key events of 2011 included Casey Anthony being found not guilty of murder, manslaughter, and child abuse in the 2008 disappearance and death of her 2-year-old daughter, Caylee. Rupert Murdoch’s media empire crumbled a bit as public backlash over claims of phone hacking and other illegal tactics mounted. On October 20th, Moammar Gadhafi, Libya’s dictator of 42 years, was killed as revolutionary fighters overwhelm his hometown of Sirte. On December 18th, Kim Jong Il, North Korea’s leader, died of what was described as a massive heart attack.

2011 also saw the death of the bookstore chain Borders. A casualty of bad management, slow adaptability, and the emergence of the eBook revolution. With it’s closing also went another 11,000 jobs. We also witnessed the end of the 30-year-old space shuttle program when the Space Shuttle Atlantis landed for the last time at Cape Canaveral, FL on July 21at. And in an event that is sad to some, Oprah aired her last episode of “The Oprah Winfrey Show” on May 25th.

As we close the books on another year, I wish all of you a Happy New Year! May 2012 bring you everything you desire, and may the Mayan calendar thing turn out to simply be a case of not having enough space to keep writing….

It’s still early in the life of eBooks and eReader devices, and it is entirely possible that this is a bubble. It’s also entirely possible that eBooks are the future. The growth in eBook popularity doesn’t lie. It took Amazon just four years of selling their Kindle eReaders for their digital sales to surpass their print sales. And just a few days ago, at an investor meeting, Barnes & Noble made some lofty predictions about their share of the digital book market. While eBook sales accounted for around $250 million of their revenue last year, their current projections are putting eBook sales at more than $2 billion by 2015.

Now, in business, projections—particularly when stated to investors—are usually nothing more than pure guesses or best hopes. However, some figures are hard to ignore. Recently, publisher Hachette Book Group announced that their eBook sales were up 134% from 2010. According to the company, eBooks now represent 21% of their net sales. In October, the American Association of Publishers released sales figures for paper books, which were down significantly. One of the hardest hit areas was adult mass market books (the small paperbacks you most often find in the supermarket checkout line), which saw a 36% decrease in sales. Conversely, downloaded audio books were up 30% and downloaded eBooks were up 117%.

Ron Callari, InventorSpot.com

There is a simple reason for this: People gravitate to what ever is easiest. It’s not necessarily a case of laziness either. People are busy, and after working all day, taking the kids to their sporting events, getting dinner ready, etc., shopping in a bookstore for something to read doesn’t always sound fun. They have to leave the house, drive to the bookstore, stand and shop, stand in line to pay, then drive home. With an eReader, they can stay home, get the kids in bed, sit down in their chair, and within minutes, find something good to read. The downloads come fast, and it’s cheaper than going to the bookstore.

From the business side of things, eBooks make a lot of since, too. When a publisher decides to publish an author’s work, they are taking a huge financial risk. They have to buy the rights to the book (in some cases, they have to pay the author an advance, too). They have to pay an editor to get the book ready for print. They have to pay a designer to lay the book out for print. Then they have to pay another designer to come up with a cover for the book. Now, all of this is true when publishing an eBook as well, but what differs is that, for an eBook, their expenses largely end here. For a print book, they still have to pay a printer to print and bind the books. Then they have to pay their salespeople to talk retailers and libraries into buying copies of the book. Then they have to pay to ship (heavy, expensive) boxes of books to those stores and libraries. All of this expense comes before even one copy is sold. It’s a huge risk, and in today’s digital world, it’s an outmoded business model. Digital is cheaper to produce, there’s no shipping, and if it doesn’t sell well, there’s no inventory clogging up warehouse shelves.

As of now, the future of printed books is unclear. I certainly hope that eBooks aren’t the death of print books, but one thing is clear, we will see a lot more eBooks published in the coming years. And with that, we will see more bookstores close, as illustrated by the recent Borders closings. The writing is on the wall, and in big block letters: THE REVOLUTION IS COMING.

A Sam Goody store having a going out of business sale.

This particular revolution is shaping up a lot like the iTunes/iPod music revolution did. With the iPod, there was some initial hesitation from people over buying a device to listen to their music, but as prices of iPods and other MP3 players fell, more and more people joined the revolution. People embraced the revolution because it meant they had access to a bigger selection of music, at much lower prices. Bands embraced the revolution because it allowed them to have more control over their music, and to see more of the profits from the music they created. Additionally, music listeners were no longer limited to the bands on the record store shelf. The revolution allowed smaller bands from around the world—bands who had never been signed by a record label—to produce their own albums and make them available to anyone in the world. The Internet allowed them to market their music, and iTunes allowed them to sell it to a huge potential audience. And when music listeners could download an unknown band’s album for $10, instead of buying an $18 CD in the store, they were more willing to take a shot on the new band.

Another, and more recent analogous of this type of revolution is the Blockbuster Video/Netflix revolution. It used to be that when you wanted to watch a movie that you didn’t own a copy of, you’d go down to the video store and rent one. Much like shopping for a new book, it was somewhat inconvenient, but it was the only way to rent a movie. Then came a company called Netflix (though previous variations such as the failed DivX rental system had attempted to revolutionize the industry, Netflix was the first to suceed). Neflix eliminated the trips to the video store by having DVDs come straight to your mailbox. It took Blockbuster a long time to join the revolution, but once they did, movies by mail became the norm. That is, until Neflix found a way to eliminate trips to the end of your driveway to get a DVD. Streaming, on-demand movies are now the norm. For a reasonable monthly fee, you’re free to watch all the movies and TV shows you want without even getting off the sofa.

eBooks offer the same conveniences for the consumer. And like the digital music industry, eBooks offer greater conveniences to the content creators. There is a common view of book authors as rock stars in their own right. Many people assume that published writers are rich and famous. This is usually not the case. Their publishers make the most money, and the writer gets what’s leftover. This is somewhat fair, since the publisher is taking the financial risk. However, the new digital book world shifts this paradigm. Now, for a minimal financial risk (typically around a few hundred dollars), a writer can publish and distribute their own eBook, and keep all of the profits from it.

Self-publishing is by no means a new idea. Many well-known books were originally self-published (Chicken Soup for the Soul, The Joy of Cooking, The Elements of Style, and many, many more). What has changed with eBooks is the distribution of self-published books. Typically, when self-publishing a print book, it was incredibly difficult for an author to get their book onto store shelves. With big box bookstores like Borders and Barnes & Noble eliminating the small, interdependent booksellers across the country, authors were at the mercy of corporate policies. To be fair, Barnes & Noble has long had a program in place where they carry self-published authors in local stores, but it is still difficult for authors to get their books in stores not in their local markets. eBooks solve the problem of geography. Once your eBook is available in major eBook stores like Amazon and Barnes & Noble (which is much easier to do than getting a print book on a store shelf), it is immediately available to anyone with an eReader or eReading app on their smartphone or tablet computer. The only obstacle remaining for the author is marketing and publicity, a problem authors have in any kind of publishing. (Another misconception of the published writer is that their publisher markets their book, this is not always the case, and most published authors receive very little publicity from their publisher.) Digital self-publishing would probably die there, suffering the same hurdles as self-publishing a print book, if not for one very important thing: Social media.

It has never been easier for a self-published author to gain an online fan base than it is right now. A writer can build a following on sites like Twitter, Facebook, LiveJournal, and Google+ even before they’ve written their book. Then, when the book is done, they can tell hundreds, if not thousands, of people about it with the push of a button. The best part is, they can provide a link in their posts making it even easier for anyone to purchase their eBook. Pricing is another big advantage. Since the author will keep most of the sale price of their eBook, and because they don’t have printing costs to recoup, they can price it much lower than they could a print book. If an eBook is under $5, it stands to reason that more people will be willing to take a chance on an unknown author. Conversely, a self-published author selling a traditional paperback book in a store may have to charge upwards of $20 (when a typical paperback is $14) in order to make the production of the book financially possible. Few people will take a $20 chance on reading a book from an unknown author, but the odds of someone spending $3 or $4 dollars on an eBook that sounds interesting are a lot higher.

So, it is with a certain amount of reluctance that I accept this coming revolution. As much as I love paper books, the advantages of eBooks are clear. I hope libraries never go away. I hope I’ll always be able to browse the selves of a real bookstore. I hope that the library of books in my home doesn’t someday look like a museum instead of an actual library. But I also hope that the eBook revolution turns many more people onto reading, empowers more writers to share what they create, and helps those who already love to read to find even more great books to read. If those things happen, then this will be a revolution worth embracing.