Barnes & Noble is looking at separating its Nook business in what it calls an attempt to capitalize on the growth of digital content. The company said there’s no time table for such a move nor any guarantee it will happen, but the mention of it suggests it’s very possible.

The news comes after a strong holiday season in which the bookseller said sales of digital content during the nine-week holiday season increased 113 percent over the same period last year. Sales of the Nook Simple Touch, Nook Color and Nook Tablet were up 70 percent over the last year, though sales of the Simple Touch were below expectations.

Barnes & Noble now expects fiscal 2012 digital content sales to come in around 0 million with a run rate for digital content sales to hit 0-0 by the end of fiscal 2012. And the Nook operation is now expected to generate .5 billion in sales this fiscal year. Here’s what William Lynch, Chief Executive Officer of Barnes & Noble had to say about the Nook business:

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. In Nook, we’ve established one of the world’s best retail platforms for the sale of digital copyright content. We have a large and growing installed base of millions of satisfied customers buying digital content from us, and we have a Nook business that’s growing rapidly year-over-year and should be approximately .5 billion in comparable sales this fiscal year. Between continued projected growth in the U.S., and the opportunity for Nook internationally in the next 12 months, we expect the business to continue to scale rapidly for the foreseeable future.

As Lynch mentioned, Barnes and & Noble is looking to expand internationally and is in talks with different potential partners including publishers, retailers, and technology companies. It’s understandable considering that the digital side of the business is outpacing the company’s traditional business. Barnes & Noble said retail store sales increased by 2.5 percent to .2 billion for the holiday season compared to the prior year. Comparable store sales increased by 3.4 percent this holiday season, but that was less than the 9.7 percent increase last year.

Meanwhile, BN.com holiday sales were up 43 percent to 7 million compared to the prior year, with comparable sales increasing 52 percent. The company said Nook business drove the increase of online sales and offset declines of physical product sales. Overall, the Nook business, including sales of digital content, device hardware and related accessories, increased 43 percent during the holiday period to 8 million. The company has lowered its full fiscal year 2012 forecast, saying consolidated sales will now be .0 billion to .2 billion with earnings before interest, taxes, depreciation and amortization to come in at 0 to 0 million because of the performance of the Simple Touch.

The stock is getting hammered prior to the open of the market, perhaps due to concerns that spinning off the Nook business could strip away the growing part of the company. But giving Nook its independence could allow that business to grow faster and make more aggressive moves if it’s not weighed down by the parent company.

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Continue reading Barnes & Noble Nook Tablet review

Barnes & Noble Nook Tablet review originally appeared on Engadget on Mon, 21 Nov 2011 10:00:00 EDT. Please see our terms for use of feeds.

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Nook Tablet limits internal storage for non-B&N purchased content to 1GB originally appeared on Engadget on Wed, 16 Nov 2011 10:00:00 EDT. Please see our terms for use of feeds.

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The release of the Kindle Fire has many pointing to Amazon’s vision for the tablet as a breakthrough. After all, with it’s low price, curated approach to the crowded world of Android apps and a content-first approach, it looks like someone finally got an Android tablet right.

Except that Barnes & Noble kinda got it right before Amazon.  OK, sure, so maybe the Nook Color is technically categorized by B&N as an e-reader, but in reality it was a low-end Android tablet, priced cheaply with a curated approach to content.

But that’s all just a technicality now, because while B&N may have been ahead of Amazon with the Nook Color, the Fire will still blow every other Android tablet out of the water, including the Nook Color and the new Nook tablet, which B&N introduced last week as an answer to the Fire.

So what’s more interesting with the Fire is not where it leaves B&N, which is in a fairly predictable second-place position among high-end e-readers and Android tablets, but where the Fire leaves Google. After all, the Fire is Amazon’s audacious attempt to introduce another tablet upon Google’s platform, while taking away many of the advantages that Google has gained through investing in the Android platform.

What do I mean? Well, sure, technically the Fire is built upon Android, but Amazon’s curated approach will no doubt be more about Amazon than Google, which is best exemplified by the fact that Amazon puts its own browser on the device, displacing Google’s browser. By taking the browser away and giving the consumer a server-assisted browsing experience with Silk, it will be Amazon, not Google, gathering all the data about consumer purchase and social behavior.

So what should Google do? Well, there’s not much they can do, other than continue to push hardware providers like Samsung, HTC and, of course, Motorola and others to utilize a version of Android that has all the Google services that Google was intending for consumers to use with the release of Android.

Nothing to do, except maybe…

Why Google Should Buy Barnes & Noble

Yes, Google should acquire Barnes & Noble. Wait, you ask, didn’t Google just buy Motorola, another hardware company? Of course, but the thing is, B&N isn’t a hardware company. What B&N is is a content retailer.

Like Amazon.

And content is something that Google, as much as it likes to think it is, doesn’t get. At all. The examples are numerous. The failure of Google TV.  Google’s no-show in the music space despite making noise with Google Music. And finally, there’s Google eBookstore, which, from what I can tell, is even more of a non-factor than Google Music.

Why? Because Google, for all its efforts, just hasn’t done well in content sell-through. Compared to Amazon, which is a company with content retailing in its DNA, to say Google is clunky and uncertain in this regard is putting it kindly.  And now, with the Fire, it’s likely that Amazon will show Google — and even possibly Apple — what the dominant online content-retailer can do with its own tablet device.

So how would B&N help Google? First, it would give them a division that understands how to merchandise content, both online and offline.  It would also possibly help them revive their moribund Google eBookstore as well give them an answer to the Kindle business, which is much more than just the hardware line. The Kindle is an entire ecosystem, or book industry in a box, including a growing publishing services. B&N has many of these same offerings, such as its PubIt platform, which Google could simply make its own.

Lastly, Google could also put B&N’s network of physical storefronts to good use.  Sure, Google lives in the cloud almost exclusively, but as Apple has shown, it often pays to have stores where consumers can “touch the company,” and for Google this might be even more important given that it’s hard for a company that is almost all-cloud to build trust as a lifelong content partner. Other benefits, such as encouraging adoption of Google Wallet and selling other Google hardware like the Nexus smartphones, are fairly obvious ones.

A few closing thoughts. Some would argue that buying B&N would mean Google would be competing with its partners, but that concern was put to rest with the Motorola acquisition.  And the cost of B&N would be just a fraction of the Motorola buy, given the book retailer’s sub- billion market cap. Lastly, Kobo’s acquisition by Rakuten for 5 million took maybe the only viable alternative to B&N off the market, and is another reason that Google would be wise to snatch up B&N quickly.

So what are they waiting for?

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When ereaders hit the market in 2007 they were the first of their kind. They are comparable to a small tablet device, and are something in between a small laptop and a smartphone. The difference, though, is that they were designed chiefly as a means of storing and reading books.

Many of the ebook readers on today’s market are still primarily book readers. However, within a few years of the release of the first ebook reader, new models began to hit the market with other capabilities. A common feature on some of these newer devices is the ability to connect to the Internet.

Some of today’s newer smartphones and tablet devices are being made with programs or apps for reading and storing books, though they have certain disadvantages compared to dedicated readers. The main drawback is that most require users to be connected to the Internet in order to use these features. This racks up extra data charges that many consumers are not willing to incur.

What about consumers who want to read digitally, would like to connect to the Internet at their discretion, but don’t want to pay a monthly data charge? This is where ebook readers like the Pandigital Novel come in handy. A recent Pandigital ereader review named this device and other like it a perfect compromise.

These devices are still created mainly for the purpose of reading and book storage. However, they have a Wi-Fi connectivity built in. A user can connect to the Internet within range of a free signal and not have to pay for data or use a mobile Internet stick.

When choosing a device with Wi-Fi connectivity, remember that there are several other features you’ll need to think about. The main consideration with any device is how many and what kinds of books you’ll be able to download.

Barnes and Noble and Amazon and Kobo are just a few of the major ebook suppliers. Which one you’ll be able to buy books from depends on your particular device. Be sure you research this before purchasing. Barnes and Noble, for instance, is the supplier for the Pandigital device (you can read a Pandigital Novel review online for further information).

Every week, it seems there is more evidence that the balance of power in the book industry continues to tilt towards the author and away from the all-powerful publisher. One of the latest examples is John Green, who writes fiction for young adults from his home in Indianapolis, and whose latest novel has hit number one before it has even been published. Green gives credit for this phenomenon to his Twitter and YouTube followers, but the real credit should go to him for being willing to not just use social media as a promotional tool the way some do, but to actually reach out and engage with his readers and fans.

As the Wall Street Journal  describes it, Green simply posted the title of his new book — a story about two young cancer patients called “The Fault In Our Stars” on his Twitter account — where he has built up a following of more than a million fans — and on his Tumblr blog, as well as a community forum based around Green’s work called YourPants.org. He then offered to sign the entire first print run of the book, and later followed that up with a live YouTube show, in which he discussed his plans for the book and read from a chapter of the uncompleted novel.

The whole process started on Tuesday afternoon, and by that evening, the book had apparently hit the number one spot on both the Amazon list of bestsellers and the Barnes & Noble list. Not surprisingly, this kind of word-of-mouth marketing multiplied by the force of social media has caused a lot of raised eyebrows in the industry. As one senior editor at publisher Harper Collins told the Journal:

Everyone is now focused on it, because when it works, it can be a runaway train

Obviously, not everyone is going to have the million-plus followers that Green has, or the devoted following on YouTube that he and his brother Hank have built up over years of doing what used to be called “vlogging” or video-blogging. The two have also created a couple of thriving communities of online fans such as Nerdfighters and YourPants, which are very similar in some ways to the communities that other artists such as Ze Frank have been able to create around their work (PDF link). The point is that no publisher or agent or industry had to create those things; the author did it himself with help from his fans.

Green is just one of the new authors changing the rules in the book business in unpredictable ways. Although he is still represented by a traditional publisher (a unit of Penguin Group), the kind of following he has been able to gather through social media gives him enough clout that he could easily decide to publish on his own, as author Barry Eisler recently decided to do, turning down a 0,000 advance after years of publishing through a traditional agency relationship. JA Konrath is another author who has argued that more writers should pursue the self-publishing route because it gives them more control.

Amanda Hocking is another example that many point to of how authors can become powerful entities in their own right, while controlling their own fate: Although she recently signed a -million publishing contract, her ability to negotiate that kind of deal was a direct result of the incredible success she had self-publishing her own young-adult fiction through the Kindle publishing platform, with many of her books selling for as little as 99 cents. In less than a year, Hocking was able to rack up more than million in sales, without any help from the traditional publishing industry at all.

And Amazon’s Kindle isn’t the only non-traditional outlet for authors. Startups such as Byliner are also carving out new niches in the space between the novel and the magazine-length feature, as are sites such as Long Reads and another startup called The Atavist that focuses on publishing long-form nonfiction.

Some feel that authors like Green are “outliers,” or exceptions to the rule, and that just because they can marshal an army of millions of Twitter followers doesn’t mean others can. The publishing industry, these critics say, is becoming more and more like the pop-music business, which focuses its attention on a few million-selling mega-stars — the book equivalent of Brittany Spears or Justin Bieber — while ignoring the bulk of writing that occurs outside the spotlight, where authors don’t get access to the publicity machine.

That may be true, and it may be that not every author can become John Green or Amanda Hocking. But that doesn’t change the fact that the same tools that these authors have used, whether it’s Twitter or YouTube or the Kindle Singles publishing platform and 99-cent books, are available to anyone who wants to use them. In a lot of ways, this takes more effort than simply signing with an agent and then complaining when the publisher doesn’t promote your novel properly and your sales tank — but at the same time, it gives authors more power to affect their own future, and create their own success.

Post and thumbnail photos courtesy of Flickr users Jeremy Mates and marya

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