Barnes & Noble May Spin-Off Nook Business

Barnes & Noble revealed on Thursday it is considering a spin-off of its Nook e-reader business while also reducing its forecast for full-year 2011 earnings. Shares of the company fell more than 17 percent in Thursday’s session after the report. Barnes & Noble has struggled in recent quarters to keep up with Amazon, whose Kindle e-reader is the fastest-growing brand on the market. The company is now expecting earnings of between $150 and $180 million for 2011, down from a previous forecast predicting earnings of $210 to $250 million.

On the bright side, Barnes & Noble did note that sales of Nook devices were up 70 percent during the nine weeks ended December 31st compared with the last nine weeks of 2010, while sales of digital content, including books, magazines and newspapers, rose 113 percent from the year-ago period. But while the bookseller’s digital business is performing well, the company’s physical sales of books rose just 2.5 percent.

Should the company decide to spin-off the Nook business, many analysts question what that will mean for the fate of the company as a whole. The last major US bookseller after Borders went under last year, Barnes & Noble has seen its shares fall 5.2 percent over the last month, and that’s before Thursday’s news. The future for Nook appears to be bright regardless, but the future of America’s last big brick-and-mortar bookstore is very much up in the air.