Amid record digital sales and floundering physical sales, Barnes & Noble announced today that it plans to explore spinning off its Nook and e-book business.
Barnes & Noble is in the precarious position of having its losing physical bookstore business dragging down its growing e-reader/tablet and e-book business. Because of that setup, the company?s financial picture is ugly. The company just cut its sales forecast for fiscal 2012, which ends April 30, to between $7 billion and $7.2 billion. It also expects losses of between $1.10 to $1.40 per share for the year.
But when you look at the Nook specifically, the picture is rosier. The Nook family of e-readers/tablets, including the Nook Simple Touch, Nook Color and Nook Tablet, set records over the holidays, with overall sales up 70 percent from 2010. In regards to content, B&N expects to sell $450 million worth of content in 2012, which would make the entire business worth around $700 million by the end of the fiscal year.
?We see substantial value in what we?ve built with our Nook business in only two years, and we believe it?s the right time to investigate our options to unlock that value,? said B&N CEO William Lynch in a statement. ?We have a large and growing installed base of millions of satisfied customers buying digital content from us, and we have a Nook business that?s growing rapidly year-over-year and should be approximately $1.5 billion in comparable sales this fiscal year.?
Barnes & Noble will report its third quarter earnings around Feb. 21. We would expect a final decision concerning the Nook business by this time.
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Companies: Barnes & Noble
Sean Ludwig is a staff writer for VentureBeat and a technology consultant. Sean covers mobile tech, social media, streaming media, and cloud services. He runs Ludwig Social Solutions and has written for PCMag, Fast Company, Computer Shopper, LAPTOP Magazine, and Seattle Weekly. Follow him on Twitter at @seanludwig or on Google+ at http://gplus.to/seanludwig. Please send all pitches to tips@venturebeat.com.
Source: http://venturebeat.com/2012/01/05/barnes-noble-spin-off-nook-business/
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