UPDATED 12:10 EDT / JANUARY 05 2012

Why is B&N Selling Off its Nook Business?

There are two major dilemmas that Barnes & Noble, the largest book retailer in the United States,  is facing right now.

First, Sterling Publishing, B&N’s publishing division, is said to be up for sale.  Sterling Publishing is known for producing puzzle, game, and crafts books for kids and adults, which B&N bought back in 2009 for $115 million.  This signifies how “dead” the printed media is coming to be.

Second, B&N is spinning off their Nook business.

“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,” Chief Executive William Lynch said.

Contradicting reasons for a sale

But the real reason for the business spin-off is vague at the moment, as the press delivers contradicting points.

According to a report from Mashable, the Nook family tablet sold record-breaking sales during the holidays, which led them to conclude that it was the right time for a spin-off. The article stated that the Color tablets Nook Color and Nook Tablet sold especially well, while the black and white Nook Simple Touch underperformed.

“Overall, the device and content sales were so good that the company is considering spinning off the Nook business altogether,”  Stan Schroeder of Mashable wrote.

But The Wall Street Journal reports that “the company said its sharply lower guidance for earnings resulted “primarily” from a “shortfall in the expected sales of Nook Simple Touch” as well as additional investments to expand the Nook business such as advertising support.”

The WSJ continues by stating that B&N “overanticipated the growth in consumer demand for single purpose black and white reading devices this holiday.”  Their tablet offerings are being gobbled up by Amazon’s cheaper Kindle Fire and of course the top selling Apple iPads.

Barnes & Noble is said to be in talks “with strategic partners including publishers, retailers and technology companies in international markets” in order to expand in the international market.  If the company will be able to find a strategic partner, B&N will be able to continue expanding their digital business.

Always ready for change

This is not the first time that the company thought it was time for a change.  Just last year, they wanted to sell their business but when Borders Group, their largest brick-and-mortar rival finally called it quits, it gave them another sliver of hope and received investment from John Malone and his Liberty Media.


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