Investors Optimistic on Barnes & Noble Over Nook Success

by Christopher Freeburn | October 12, 2012 11:52 am

Barnes & Noble (NYSE:BKS[1]) estimates that its Nook  Media unit, which combines its tablet, e-book and college textbooks business[2], will produce revenue of $3 billion in 2012. Analysts say the bookseller’s Nook business grew about 30% over last year, offsetting slower growth at its textbook business. In a recent vote of confidence, Microsoft (NASDAQ:MSFT[3]) acquired a 17.6% stake in Nook Media, Reuters noted.

Investors also appeared pleased with the news, sending shares of Barnes & Noble up more than 8% on Thursday, though shares retreated more than 3% in Friday morning trading.

In September, Barnes & Noble unveiled updated Nook tablets, including its Nook HD, which can play video. The new tablets position the company to compete in the burgeoning 7-inch tablet market, where it faces rival devices from Amazon (NASDAQ:AMZN[4]), Google (NASDAQ:GOOG[5]) and a widely-expected entry from Apple (NASDAQ:AAPL[6]), meant to fend off competition from smaller Android-based tablets[7]. It also introduced the Nook HD+ with a 9-inch screen, targeting Amazon’s Kindle Fire HD and the existing iPad.

Company officials said that advance orders for the new tablets were 240% higher than previous Nook device launches.

The company will begin selling e-books through its website in nine new countries by the middle of next year. It is already selling e-books in the United Kingdom.

Endnotes:
  1. BKS: http://studio-5.financialcontent.com/investplace/quote?Symbol=BKS
  2. which combines its tablet, e-book and college textbooks business: http://articles.chicagotribune.com/2012-10-10/business/chi-barnes-noble-sees-fast-growth-with-nook-will-expand-to-9-new-countries-20121010_1_nook-e-readers-e-reader-business-peter-wahlstrom
  3. MSFT: http://studio-5.financialcontent.com/investplace/quote?Symbol=MSFT
  4. AMZN: http://studio-5.financialcontent.com/investplace/quote?Symbol=AMZN
  5. GOOG: http://studio-5.financialcontent.com/investplace/quote?Symbol=GOOG
  6. AAPL: http://studio-5.financialcontent.com/investplace/quote?Symbol=AAPL
  7. meant to fend off competition from smaller Android-based tablets: http://investorplace.com/2012/10/as-android-tablets-surge-panic-for-apple/

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