Tess Vigeland: Barnes & Noble did a little self-publishing this morning. It released its earnings and revenue predictions for the year and ’twas not a happy story.
The company slashed its forecast, and its stock price followed suit. But the bookseller also said it may be working on a new chapter for its e-reader, the Nook.
Sally Herships has more from New York.
Sally Herships: Barnes & Noble spent two years creating the Nook, its digital reader. Now digital books are booming. And today, the company said it may spin off the Nook.
Jim Milliot works with Publishers weekly. He says this will take another bite out of Barnes & Noble’s already struggling bookstore business.
Jim Milliot: But for Barnes & Noble, they want to stay in the book or digital content business, this is where you have to go.
And it’s going to be expensive to get there. Barnes & Noble is in the process of selling Sterling, its publishing arm. Milliot says B & N is hoping to raise around $80 million, all to bolster the Nook.
But remember, Barnes & Noble knows how to sell books — not make electronics like the Nook. Peter Wahlstrom is an analyst with Morningstar.
Peter Wahlstrom: There’s a shell, there’s a screen, there’s a CPU or a processor.
He says the Nook needs the kind of expertise and attention required to keep up with big competitors like Amazon and Apple. Prashant Malaviya teaches marketing at McDonough School of Business.
Prashant Malaviya: Thee capability of the Nook is going to be significantly less than the iPad, so why buy a Nook?
Barnes & Noble says customers are buying. Holiday sales were up 70 percent over last year. And sales of the the color Nook tablet topped expectations. And Morningstar’s Peter Wahlstrom says even if B & N does spin off the Nook, the company still has more chapters left to write.
In New York, I’m Sally Herships for Marketplace.