Digital Textbook Startup Kno Was Sold For $15 Million

Nate the greatest writes "Intel didn't mention how much they paid for digital textbook startup Kno when they announced the acquisition last week but inside sources are now saying that the digital textbook startup was picked up for a song. GigaOm reported earlier today that their sources told them that Kno sold effectively for pennies on the dollar: 'Well placed sources who were in the know told us that the company sold for $15 million with some retention bonuses for the employees. Intel bought the company mostly for its hardware-related intellectual property and the employees. Intel also was one of the largest investors in the company — having pumped in $20 million via its Intel Capital arm.' Kno had raised $73 million in venture capital since it was founded 4 years ago, and it picked up another $20 million in debt. This deal was nothing less than a fire sale, and that does not bode well for the digital textbook market or other startups in this niche. Inkling, for example, just raised $20 million dollars this summer in order to compete in a market that where one of their competitors failed."

Speaking as someone in the industry

[Malfuros the Wizard]

I create ebooks - specifically law ebooks, they are authored by a barrister who is very good at what he does. I run the technical side of things, we tried to make it easy for people to access the material, either via a website or on platforms like the Kindle, no DRM involved because as we all know DRM is useless anyway. After trying to do this for a few years my opinion is that its almost impossible to make money from it, mainly due to piracy. People wanted a cheaper alternative to textbooks that were tens if not hundreds of dollars to buy so we started creating ebook versions, all that happens is people rip us off, even if we are selling the books for $3 a piece. They also rip material off from our website, someone subscribes, pays for one account, then copies everything and distributes it via email. We at one point had Amazon remove some of our books from their store because they accused us of ripping someone else off, that only got rectified when we proved we were the original authors. I would love for there to be a DRM system that allowed people to use the ebook on any device of their choosing as long as it was their device, I dont care if people have several devices so long as they have paid me for their book. But it needs to be a DRM system that works, that is really locked down but that also allows people to sell or gift their books to others. But not to copy them freely and rip off small micro publishers like us. Sadly piracy is accepted as the norm, even when publishers are practically giving stuff away for free. People just share stuff, they dont think about what goes into creating the stuff they are sharing, they dont think that people need to make money from what they create in order to pay bills and mortgages. The original paper book is a fantastic device, you buy a copy, its yours to do with as you please, if you decide to give it to someone else or lend it to them then you can do so easily however you are giving away your copy, you cant create a copy of a physical book, at least not easily, thats is the inbuilt protection for the author and the publisher, the fact that is is a single item. Until the same principle exists in electronic publishing then it will be impossible to make money from it.