In case you forgot that things were not going well in the print publishing industry, on the heels of bookseller Borders' bankruptcy earlier this year,
Barnes & Noble Inc. said it [is] 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.
The company said its warning of a larger full-year loss 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.
—John Kell, WSJ [note: content of article was updated after this posting]
Here's the problem with separating the two businesses: the online Nook experience is still terrible. It is nearly impossible to find new books on the Nook website. Most friends that own Nooks use Amazon's website for their browsing, and the B&N site for their actual purchasing. B&N has only been able to drive sales of Nook readers because they are using their massive cross-country store infrastructure to sell Nooks to their brick and mortar customer base. How can they hope to push Nooks if they are not in stores?
And Nook's online marketing is anemic too. I cannot go anywhere on the internet without running into an Amazon or Apple product. I haven't seen a new Nook advert in ages.
So, if the online shopping experience is bad, if people only normally come across the Nook while shopping at B&N retail stores, and if they have no clear source of capital to save either of these two "new" companies, how the heck is B&N going to be able to enhance their share of the e-book market?
That explains the plummeting B&N share price.
And if you didn't hear,
On Wednesday, The Wall Street Journal reported that Barnes & Noble has put its Sterling Publishing business up for sale, signaling a likely end to its decades-long involvement in the publishing of its own books.
The questions I'm asking myself:
- Where the heck am I going to buy print books next year?
- Will publishers face another inventory return nightmare like during the Borders collapse...and can they all weather it?
- What is Apple's next move? (There are already plenty of rumors.)
- And what am I going to do with my Nook Color, turn it into a picture frame?