B&N May Spin Off Nook

Seems to be a sign that company is struggling against Kindle
By John Johnson,  Newser Staff
Posted Jan 5, 2012 12:48 PM CST
Barnes & Noble May Spin Off Nook
In this Nov. 7, 2011, file photo provided by Barnes & Noble a demonstrator holds the new Barnes & Noble Nook Tablet.   (AP Photo/Barnes & Noble, Jim Sulley, File)

Trouble in Nook-ville? Barnes & Noble shares lost about a quarter of their value this morning on the surprising news that the company might spin off its Nook e-reader. B&N has poured a ton of money into the e-reader business, but the news suggests it's losing the arms race to Amazon, with its deeper pockets and mighty Kindle, reports Reuters. Overall Nook sales were up 70% in the last nine weeks of the year, but sales of the basic model—the $99 Nook Simple Touch—fell short over the holidays. B&N lowered the yearly sales forecast for Nooks from $1.8 billion to $1.5 billion.

CEO William Lynch put the potential move in a positive light, telling the AP that the company wants to "unlock value and shine a bright light on that business." One analyst at Michael Norris voices a common skeptical refrain: "Separating Nook from the Barnes & Noble brand would be a huge mistake. A lot of people who buy e-books buy physical books as well. Do they really want to tamper with that kind of marriage?" (More Barnes & Noble stories.)

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