A source allegedly familiar with Barnes & Noble's corporate strategy has leaked to The New York Times that although B&N is "not completely getting out of the hardware business, they are going to lean a lot more on the comprehensive digital catalog of content."
The revelation may mean that executives at B&N are considering a radical shift of focus away from its low-margin hardware and instead concentrate on licensing its content to other platforms.
This news follows on the muddy heels of Barnes & Noble — the world's largest book chain — anxiously noting that when it reports third-quarter results on Thursday, Feb. 28, "losses in its Nook Media division — which includes sales of e-books and devices — will be greater than the year before."
B&N anticipates that the unit's revenue for the entire year of 2013 will be far below the company's original prediction of $3 billion.
The analysis by The Times sees the possible upcoming shift as a portent to B&N's hitting bottom in its investment in the digital realm as a means of continuing to keep afloat during a time period wrought with hardships for brick-and-mortar stores, such as its competitor, Borders.
The Times' source continues that when B&N's fiscal report is released on Thursday, the company will "emphasize its commitment to intensify partnerships with other tablet producers like Microsoft and Samsung to make deals for content that it controls."
It was only one year ago that B&N made its "last stand," as per an interview in the New York Times.
"Had we not launched devices and spent the money we invested in the Nook, investors and analysts would have said, 'Barnes & Noble is crazy, and they're going to go away,' " Barnes & Noble CEO William J. Lynch Jr. said.
One year and one month later (to the day), all of that is about to change should Thursday's announcement indeed be one of a total flip on the subject of engineering Nook as B&N's future.
"In many ways it is a great product. It was a failure of brand, not product," Sarah Rotman Epps, a senior analyst at Forrester, says about the Nook."The Barnes & Noble brand is just very small. It has done a great job at engaging its existing customers but failed to expand their footprint beyond that."
B&N chairman Leonard Riggio, who is also the company's largest shareholder, may soon buy out the chain with the intention of splitting the company in two, reports The Wall Street Journal.
Seventy-one-year-old Riggio made a regulatory filing on Monday, Feb. 25 in which he states that he wishes to purchase B&N's stores and website but not its Nook Media LLC.
Nook Media includes both B&N's Nook division and its college-store chain.
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