Barnes & Noble shares plunge on Nook pullout

Competition from Apple, Google and a host of other rivals proves too intense for the bookseller.

By Kim Peterson Jun 25, 2013 1:09PM
Credit: © Barnes & Noble handout/AP Photo
Caption: Barnes & Noble's new Nook tabletUpdated 5:20 p.m. ET

Barnes & Noble
(BKS) is raising the white flag in the tablet war, and its investors are hopping mad about it.

Shares of the bookseller plunged 17% Tuesday afternoon to close at $15.61 after the company said it will stop making its Nook color tablets (pictured). Now the company is looking to put the Nook name on a device made by someone else.

Barnes & Noble will continue to make the black-and-white Nook e-reader. But it made no sense to keep throwing money at a color tablet even as customers appear to be losing interest.

Nook sales fell by 34% in the company's fiscal fourth quarter to just $108 million and losses were growing, The Wall Street Journal reported.

The Nook business has struggled for years, even with Microsoft's (MSFT) decision last year to invest $300 million in the division for a 17.6% stake. (Microsoft owns and publishes moneyNOW, an MSN Money site.)

Amazon.com (AMZN) has continued to plow money into developing and marketing its Kindle line of e-readers and tablets. Amazon was able to lowball its Kindle prices, staying with its strategy of essentially subsidizing the hardware in hopes of making more money on sales of e-books and other digital content. Amazon shares, by the way, barely budged after the Nook announcement.

There are plenty of good tablets in development -- many built on the Android operating system from Google (GOOG) -- and Barnes & Noble can easily make the jump from developing its own reader to slapping the Nook name on a third-party device. And if the company handles it right, customers may not notice any change.

Still, the news was a defeat for Barnes & Noble and did nothing to stem worries that the retailer is headed for niche status.

More on moneyNOW


32Comments
Jun 25, 2013 1:53PM
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That is one of the principle problems with the pace of today's technology.  By the time that you buy something it is already becoming obsolete.  I haven't even learned to use all of the features on my new smart phone and the manufacturer has already introduced a newer one with even more features.  Frankly I just accept that I already have all that I wanted in the first place and am glad that I am not paying for the new stuff that I probably wouldn't use anyway.  LOL

 

Simply put if you just want to have the latest and greatest more power to you and I hope your wallet can hold up to the stress.  To be happy just decide what you actually need and once you have it quit looking over the fence at the new stuff at least until you really have a need for it. 

Jun 25, 2013 1:39PM
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Oh, just great.  Now what do I do with the Nook tablet I bought last year?
Jun 25, 2013 3:18PM
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I have the b&w Nook and it serves me well. I read books. I don't need it to do tricks.
Jun 25, 2013 2:12PM
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I love my Nook HD.  I use it to borrow books from my local library, watch movies and TV shows, listen to music, and even make calls with it through the Skype app.
Jun 25, 2013 3:05PM
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The Nook you have will continue to work, you just cannot buy a new one.  It is sad. The big guys gobble up the littler guys. I like my Nook Tablet  and am really sad that there won't be any upgrades.
Jun 25, 2013 2:49PM
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I love my Nook reader (black and white, as basic as it gets), so I'm glad they're keeping those around. Saves space from having lots of books around since I love to read. I never considered buying a more advanced Nook.
Jun 25, 2013 3:59PM
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Their marketing was terrible! They got the first part right, nice store display with someone to show you how it works, what you can do with it, but their follow up was TERRIBLE! They didn't do anything to get me in the store when the new ones came in--no email, no snail mail, no phone calls, though they had all the info from me.
Jun 25, 2013 3:57PM
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Wow! I was actually looking at these yesterday. Guess I'll avoid it and buy a Google Nexus 7 instead. Its a shame, because the Nook is cheaper and does most of the same stuff with a better screen.
Jun 25, 2013 4:09PM
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My wife has a color nook and a b&w nook. They both sit on the shelf because see reads from her 4 inch screen on her cell phone now. What a waste of money...
Jun 25, 2013 7:53PM
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If you have any tablet, you can use it as a Nook.  Why spend money of a physical item, when all you need is software?
Jun 25, 2013 8:46PM
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I just bought a NOOK HD+ less than 2 weeks ago when it was on sale for Father's Day. I can use it for much more than just a ebook reader. It has it's pluses/minuses just like any other electronic device. I did purchase an extended warranty thru a 3rd party so if it blows up or gives up the ghost I get my initial money back. It's versatile enough for what I need it for. I'm positive that store employees had to know that the signs were there for B/N to abandon the making of color tablets. One thing for sure is that B/N aftermarket support STINKS.. To have to call a call center in India to get even minor support is silly. The people there are ill-informed, and do little to work with someone who needs answers. My nearest B/N brick and mortar store is almost 40 miles away, and I hope that someone brings some answers to the table before B/N goes the way of Borders/Waldenbooks/B. Dalton...The NOOK HD+ that was "supposed" to only be on sale for the Father's Day weekend is still on sale on the B/N website. This either says- 1) they are trying hard to dump inventory, or 2) they are trying to get people to buy their tablets with the hopes that they can still sell downloads for them..

 

Jun 25, 2013 2:53PM
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I was going to buy one last Christmas, but there were many features lacking (such as an integrated camera).  I ended up purchasing Amazon's Kindle instead.  My wife loves it!
Jun 25, 2013 6:00PM
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I don't care about Nook because I prefer the 100% free public library.  BUT - my mom has a Nook and sometimes needs help with it.  I foresee that B&N, after configuring their stores to have a huge Nook service areas, will quit staffing them.  In not too long when my mom goes in with a question, some clerk will look around and say, "Well, Jason's the only one here who still knows anything about those and he's at lunch."
Jun 25, 2013 7:58PM
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This is so sad to hear since I am a 3 time Nook owner.  Love the product just because of the choice they made of keeping the cameras off the HD Nooks.
Jun 25, 2013 5:06PM
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I hope the people who bought the unit recently are not left with an almost immediately obsolete and useless unit. The least Barnes and Noble can do is to protect customers who just bought the device during a heavy promotional campaign. I thought that the addition of Google apps was a huge upgrade. They did not give it an opportunity to succeed with this upgrade.   
Jun 25, 2013 4:14PM
Jun 25, 2013 4:10PM
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reports say barnes and nobles are shuting down as many as 85% of their stores

early next year.. the ebook and cheap prices online are killing them. no wonder.

Jun 25, 2013 7:53PM
Jun 25, 2013 4:12PM
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damn first boarders book stores,crowns few others and B&N Lossing

big time.. their stock is WAAAAY DOWN  their book sales is way down.

they could be out by mid. next year.

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