Technology

Barnes & Noble May Sell The Nook Division

Whenever a company is saying it might be selling the division that is most successful and has momentum, there should be some kind of red flag popping out. It is the case of Barnes & Noble, company which has announced it is taking into account the possibility of selling the Nook division, its fastest-growing unit.

Barnes & Noble is the largest U.S. bookstore chain which over the past few months has been having raving success with its Nook e-reader business. Recent statements from the company’s executives point out that Barnes & Noble might be looking for some buyers.

The chain’s officials say that they want to unlock the value of the Nook business and bring it to foreign markets. Thus, it has initiated discussions with some potential partners outside the United States. Earlier this week, one of Nook’s largest investors, the chief executive of Liberty Media Corp, said that the business might be better off as a standalone business.

The company said that during this holiday season, the total sales of Nook devices surged 70 percent. And the sales came from e-books as well. Digital content and hardware devices and accessories sales have rose 43 percent to $448 million during the nine-week period ended December 31.

So, if Nook’s going so well, why is Barnes & Noble considering a possible sale? The Wall Street Journal writes that “Barnes & Noble Inc. is the latest old-school company to discover how costly it can be to try to reinvent itself for a digital future”. In other words, keeping control of 27 percent of the digital-books market is no easy task.

Despite the fact that Nook remains a growth driver for the company, the costs have become too much to bare. During the last four months, Barnes & Noble has forecasted a wider annual loss than what analysts were expecting. Its stocks have plunged 17 percent to $11.24 in New York, recording the largest decline since August 19.

The constant investment in Nook and in building the digital business as more consumers turn to electronic books, coupled with not enough sales, have forced Barnes & Noble to forecast a loss of as much as $1.40 a share, a significant spike from the previous forecast at 50 cents a share.

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Ronald Silva is one of our newest publishers.He currently lives in Toronto (Canada) with his family.Ronald covers the music and sports sections of DailyGossip.org. Over the past few years, Ronald has participated in various journalistic projects including some of which he started when he worked for a local newspaper in Toronto. Contact him at Ronald.Silva@dailygossip.org.

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