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Thursday, January 5, 2012

Books / Money Barnes & Noble to Separate E-Books from Physical Books?

Posted by Paul Constant on Thu, Jan 5, 2012 at 11:07 AM

Barnes & Noble Inc. said it exploring a plan to separate its successful but costly Nook electronic-book business as it warned investors that full-year results would show much more red ink than previously forecast.

Shares sank nearly 24% in Thursday morning trading.

"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.

I guess it makes sense; e-books and book retailing are two completely different businesses, and trying to run them both under a single umbrella must be unwieldy as hell. Still, I think Barnes & Noble is officially in Too-Important-to-Fail territory nowadays—bad news from the only physical book retailer in many American markets is bad news for everyone.

Comments (6) RSS

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This is a horrible idea. Being able to create a customer experience incorporating the brick-and-mortar and online businesses is a way to differentiate their offerings from someone like Amazon. The fact that both businesses are not performing to expectations is not going to be improved by creating two separate entities.

Posted by sisyphusgal on January 5, 2012 at 11:57 AM

Was a bad idea when Netflix proposed it, and is a bad idea now.

Posted by NateMan on January 5, 2012 at 12:07 PM

wouldn't failure re-open the door to indie bookstores B&N crushed in the 90s?

is wal-mart too big to fail?

Posted by r.chops on January 5, 2012 at 12:12 PM

This is a company looking to get bought out, I think. Amazon has benefited from offering them both.

Posted by Canadian Nurse on January 5, 2012 at 12:12 PM

Imagine Amazon buying B&N retail and going brick-and-mortar. Would you shop at Amazon at the mall?

Posted by bedipped on January 5, 2012 at 2:51 PM

Spinning off e-books will allow the brick-and-mortar Barnes & Noble to go bankrupt and reorganize/downsize. The e-book company will probably be profitable, and this way the shares of the profitable business can grow while the others crash, which should insulate shareholders a bit (and maybe even benefit them over the long term).

Posted by Simac on January 5, 2012 at 3:32 PM