Book company to float Net division
Barnes & Noble takes Amazonian approach
Loss-making US book retailer Barnes & Noble is to follow rival Amazon.com and float its online book-selling division. Barnes & Noble said it would file for an initial public offering for its barnesandnoble.com offshoot, in an attempt to cash in on the Internet stock boom. A number of US Internet companies, most recently GeoCities, have seen stock values soar within hours of floatation. Barnes & Noble said that it would float 20 per cent of the on-line division within 30 days. Barnesandnoble.com - launched in March 1997 - lags behind Amazon.com in the online book wars. Amazon.com has a market capitalization of $6.4 billion, which is 14 times revenues. It has also never made a profit. In Q2 1998, barnesandnbole.com posted revenues of $12.5 million, barely a tenth of Amazon.com's $116 million. Overall Barnes & Noble made a loss of $5.7 million on sales of $675 million for its most recent quarter. US analysts pointed out that Amazon.com clearly leads the estimated 14,000 web sites that sell books, but said that the market was expanding at such a rate that barnesandnoble.com could expand without going head to head with Amazon.com.