Barnes & Noble, Inc. (BKS): Should This Company Split in Two?

Meanwhile, Pearson recently made a $90 million investment in Nook Media to further enhance its ambitions in the online education market. The company is the largest player in the global education business, offering classroom materials and online learning programs to systems in over 70 countries. Pearson likely sees the Nook technology platform as a delivery vehicle for effectively delivering its educational products to its millions of customers.

In its latest fiscal year, Pearson posted mixed financial results, as growth in global education spending was constrained by government funding pressures. For the period, the company reported a 4.3% increase in total revenues and flat adjusted operating income compared to the prior year. While Pearson’s near term growth is being impacted by its strategic business restructuring, including the divestiture of its iconic Penguin Publishing unit, its long term prospects should be enhanced by the company’s shift to a subscription-based revenue model.

Barnes & Noble, Inc. (NYSE:BKS) is a tailor-made case of the parts being worth more than the whole. The company needs to stick with its roots in retailing and offshoot its tech unit to a strategic buyer that can use the platform to drive incremental digital media sales. While the timing of a transaction for one or both parts of the company is uncertain, investors are likely to be well rewarded.

Robert Hanley owns shares of Barnes & Noble. The Motley Fool owns shares of Microsoft. Robert is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

The article Should This Company Split in Two? originally appeared on Fool.com and is written by Robert Hanley.

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