Barnes & Noble announced that it's considering spinning off its Nook e-books business. The announcement came alongside holiday sales figures showing Nook e-reader sales were up 70 percent year-on-year in the nine weeks to 31 December 2011. The bookseller said that sales of the Nook Tablet exceeded expectations, while sales of the Nook Simple Touch were below expectations, "indicating a stronger customer preference for colour devices". Digital content sales also grew sharply during the same nine-week period, increasing 113 percent on a comparable basis. This includes digital books, digital newsstand and the apps business. The company expects digital content sales for the fiscal year 2012 to total around USD 450 million, while annual sales should be at a run rate of USD 700-750 million by the end of the fiscal year. With the total Nook business expected to generate sales of USD 1.5 billion this fiscal year, Barnes & Noble said it's looking at ways to "unlock the value" of the activities. The company will look at strategic ways to separate the Nook business and is also in talks with publishers, retailers, and technology companies in international markets that may lead to expansion of the Nook business outside the US. Extra costs for growing the Nook business, as well as the shortfall in Nook Simple Touch sales, led B&N to cuts its full-year EBITDA outlook to USD 150-180 million, from an earlier estimate of USD 210 million. Annual sales are forecast at USD 7.0-7.2 billion, and the loss per share is estimated at USD 1.10-1.40. The company said that although it over-estimated demand for the black-and-white e-reader, it will continue to market the Nook Simple Touch.
