New York City -- Barnes & Noble said Thursday that it is beginning “strategic exploratory work” to separate the Nook division in an effort to help the emerging business grow.
“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,” said William Lynch, CEO, Barnes & Noble.
In an interview with the Associated Press, Lynch said the Nook review is an attempt to provide more visibility into Nook operations, which Barnes & Noble doesn't believe are valued as highly as they should be by investors and analysts.
He said the company is looking at a "range of options" for the Nook business, which the company expects to generate $1.5 billion in revenue in fiscal 2012. He declined to comment on whether the company was considering selling the business outright. The review is expected to be complete by the end of the year, the report said.
Analysts were not happy with the news. "Separating Nook from the Barnes & Noble brand would be a huge mistake," said Simba Information senior trade analyst Michael Norris, in the report. "A lot of people who buy e-books buy physical books as well. Do they really want to tamper with that kind of marriage?"