Nook Separates From Barnes & Noble
Barnes & Noble announced they are separating their Nook technology unit from retail operations. It will improve the bottom line for the beleaguered retail company. Also, it is hoped the new company will help the Nook gain market share against the Amazon’s Kindle, which is far and away the market leader.
Michael P. Huseby, Chief Executive Officer of Barnes & Noble, said, “Our fiscal 2014 results and solid financial position at year-end reflect the positive impact of those actions. We believe we are now in a better position to begin in earnest those steps necessary to accomplish a separation of Nook Media and Barnes & Noble Retail.”
Barnes & Noble will continue to sell Nook devices and ebooks. Huseby said, “We have determined that these businesses will have the best chance of optimizing shareholder value if they are capitalized and operated separately. We fully expect that our Retail and Nook Media businesses will continue to have long-term, successful business relationships with each other after separation.”
Nook, which uses the EPub file format, has not been popular with consumers. The change comes after years of the Nook business hemorrhaging money and losing market share to Amazon.
According to the Barnes & Noble annual report, “Device and accessories sales were $25 million for the quarter and $260 million for the full year, declining 30.1% and 44.8%, respectively, due to lower selling volume and lower average selling prices. Digital content sales were $62 million for the quarter and $246 million for the full year, declining 18.7% and 20.6%, respectively, due primarily to lower device unit sales.”
In 2013, Nook lost almost $500 million dollars and caused a shake-up in Barnes & Noble management.
Microsoft owns a 17 percent stake in Nook as a result of the $300 million investment they made to settle a patent lawsuit with Barnes & Noble in 2012. The partnership between the two companies hasn’t worked as expected, and Barnes & Noble is co-branding a Nook tablet with Samsung. The formation of a new Nook public company will give Microsoft an opportunity to reevaluate its Nook holdings.
For most Christian writers, the issue will be whether or not to invest the time it takes to create EPub files for the Nook, and to drive traffic to the Nook site. The Amazon platform continues to grow, and ebook buyers are not locked into a specific reader. Kindle apps can be used on any computer, smart phone or and tablet, so the Kindle platform continues to offer the kind of flexibility that authors need.