Forget for a moment the tiresome question of whether or not
has the right stuff to take on
. The better question -- the one hundreds of established business leaders and their investment banker advisers are asking -- is how to find the right management team for a "hybrid" enterprise, a dot-com organization being slapped together under the aegis of a threatened behemoth.
If there is a model for the hybrid CEO, it's probably Jonathan Bulkeley, barnesandnoble.com's chief executive. A veteran of
unit before that, Bulkeley rode to the rescue of
Barnes & Noble
earlier this year, in time to salvage the book retailer's dot-com-ization efforts which faltered in late 1998.
It's extremely tough to say if Bulkeley is good for investors: barnesandnoble.com's shares closed Friday at 19 3/16, just a buck and change over the online merchant's May 25 initial public offering price of 18. Despite having raised more than $486 million -- and that's very good for barnesandnoble.com's operations -- such a sluggish stock performance excites neither click-happy retail investors nor the just-ensure-my-15%-gain institutional crowd.
The easier call is that 38-year-old Bulkeley is right for Barnes & Noble. In other words, if the goal is to grab the glory (read: riches) of the new economy and preserve the old-world company's franchise, a Bulkeley-like executive who "gets" online but has the pedigree to soothe the stuffed suits is most likely to succeed.
"It's not about cannibalization," coos Bulkeley, in an interview last week at barnesandnoble.com's minimalist offices on the edge of Manhattan's hip Chelsea neighborhood. "It's about consolidating the purchasing activity between the two shopping channels. Nobody's executed it. We'll be the first to execute it successfully."
Translation: Bulkeley's job is find a way to sell consumers books, music, software and magazines online while encouraging those same customers to continue to mosey into a Barnes & Noble store and do the same thing. Presumably, Barnes & Noble stores need to send its customers online as well for Bulkeley to succeed.
But note the soft tones and the lowered expectations about what it takes to win. And listen to the relatively genteel approach to Amazon, the target of so much Barnes & Noble venom over the last two years:
"This is not about stealing Amazon's customers and making them Barnes & Noble customers," says Bulkeley. Rather, the challenge is to sign up the vast number of book buyers who haven't yet bought online. Bulkeley spouts the obligatory self-serving statistics that of 104 million Americans who bought books last year, 41 million bought seven or more and only 8 million purchased any online. Told that I've bought from barnesandnoble.com only once (it worked fine) and that
retailing maven and co-interviewer
never has deserted the convenience of Amazon, Bulkeley responds, "You guys are the early adopters." In effect, he's not as interested in us; he wants the newbies.
Bulkeley's quiver isn't without any arrows for Amazon. He swipes at the Seattle retailer's seeming designs on every market imaginable, a list that has grown from books and music to include toys, auctions, toiletries and electronics, among other items. "We're focused on a specific set of products that fits nicely together and is able to be cross-merchandised," says Bulkeley. "I do not want to sell toothpaste."
He also trumpets the capabilities of minority shareholder
of Germany, whose book clubs reach 5.5 million members. (barnesandnoble.com's IPO filing with the
Securities and Exchange Commission
also notes that various units of Bertelsmann may be competitors to barnesandnoble.com, but that's kind of a messy issue for a CEO to raise.)
Most telling is Bulkeley's professed timeline. barnesandnoble.com can bring down marketing costs to the point where it's profitable in three years, says Bulkeley, adding that signing up newbies simply takes time. "I'm not predicting anything, but you've got to look out five years, not 12 or 24 months."
Tell that to barnesandnoble.com's former chief operating officer, Jeffrey Killeen, a career
Dun & Bradstreet
guy. He lasted about a year in the job before resigning in February, forfeiting two-thirds of his unvested options and signing a one-year agreement not to compete with barnesandnoble.com. Bulkeley has reason to focus on the long-term. His annual salary of $400,000 is $100,000 less than Killeen's was. But he has options to buy 4.1 million shares over four years at $4.06 a piece.
A big-company guy with loads of online experience who can talk the talk of competition and who's got a giant incentive to succeed? Meet the desired hybrid Net exec for the beginning of the millennium.
Adam Lashinsky's column appears Mondays, Wednesdays and Fridays. In keeping with TSC's editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet.com. He also doesn't invest in hedge funds or other private investment partnerships. Lashinsky writes a monthly column for Fortune called the Wired Investor, and is a frequent commentator on public radio's Marketplace program. He welcomes your feedback at