A subsidiary opening new opportunity
Nook Media, a subsidiary of Barnes & Noble, Inc. (NYSE:BKS) announced the launch of the “Nook Snaps” program on June 6, 2013. As readers increasingly move away from print books to tablets, phones, and computers, this program has huge potential. The Yankee Group estimates global e-book sales will rise to 72 million units in 2014, up from around 11 million units sold in 2010. The company under the Nook Snap program will offer original works of almost 5,000 words, shorter than a complete book but longer than a traditional magazine or newspaper article. These shorter-length stories are the first initiative designed to cater to the diminished attention span of Internet-era readers. Additionally, stories will offer audio and video to increase the reader’s engagement and interest. Nook will refresh its exclusive works bimonthly, adding three to five new original works at a price of $1.99 each.
Nook Media made a foray into the tablet market with an Android-based offering, the Nook HD+, in November 2012. It bombed with customers, as it was costly and had a low-resolution screen. Poor sales dragged the Nook retail segment’s revenue down 12.6% year-over-year to $311 million in fiscal year 2012. Barnes & Noble, Inc. (NYSE:BKS) has announced plans to gradually discontinue its Android-based Nook tablets through fiscal year 2014. After this segment is discontinued, Nook content will be available through Nook apps on third-party devices. It is expected that Nook will generate revenue of $1.09 billion in fiscal year 2013, up from $933 million in 2012.
Bottom line:
Amazon.com, Inc. (NASDAQ:AMZN) is expanding in China, and keeping prices low for its e-books. It has increased its fees for the third party sellers, which will boost the revenue of the company.
In the case of eBay Inc (NASDAQ:EBAY), PayPal’s flexible payment procedure is increasing the active registered accounts for the company. Its continuing modifications to its Marketplace are also enhancing its users’ experiences.
Barnes & Noble, Inc. (NYSE:BKS) is currently focusing on its Nook subsidiary, and with the launch of Nook Snap should increase its revenue. The company plans to discontinue its Android-based Nook tablet devices as it is a loss-making segment.
All three of these stocks are a “buy” for the long term.
Shweta Dubey has no position in any stocks mentioned. The Motley Fool recommends Amazon.com, Inc. (NASDAQ:AMZN) and eBay Inc (NASDAQ:EBAY). The Motley Fool owns shares of Amazon.com, Inc. (NASDAQ:AMZN) and eBay Inc (NASDAQ:EBAY).
The article As the Internet’s Population Explodes, So Will the Growth of These Three Companies originally appeared on Fool.com.
Shweta is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
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