Shannon Stapleton / Reuters
The new Nook Tablet, unveiled in November 2011.
By msnbc.com news services
Bookstore owner Barnes & Noble said Thursday it is considering splitting off its Nook electronic reader business and also cut its full-year earnings forecast, citing a shortfall in sales of its basic touchscreen reader.
Shares of Barnes & Noble fell sharply on the news. Barnes & Noble, which has been battling Amazon.com's Kindle platform in the growing e-reader market, also cited higher advertising costs and costs for international expansion in cutting its earnings forecast.
By spinning off its digital business, Barnes & Noble appears to be looking to aggressively develop its position in the digital media market. But the question for investors is whether any value remains in the bricks-and-mortar portion of the company.
The company did say that sales of Nook readers rose 70 percent during the nine weeks ended December 31, compared with a year earlier and that sales of digital content, including books, apps and newspapers and magazines, rose 113 percent on a comparable basis.
"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," William Lynch, chief executive officer of Barnes & Noble, said in a statement.
Reuters contributed to this report.
Source: http://bottomline.msnbc.msn.com/_news/2012/01/05/9974163-barnes-noble-may-split-off-nook-business
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