Galaxy-Tab-4-NOOK_25
The co-branded Nook Samsung Galaxy Tab, announced by Barnes & Noble earlier this month.

Barnes & Noble plans to separate its traditional retail business from its Nook technology unit, operating them as two public companies in attempt to make them more competitive in the face of tough competition from Amazon.

The move was announced this morning as part of the bookseller’s annual earnings report, which showed an annual operating loss of $218 million for the Nook business in fiscal 2014, on revenues of $506 million, down more than 35 percent from the previous year.

“We have determined that these businesses will have the best chance of optimizing shareholder value if they are capitalized and operated separately,” said Mike Huseby, the Barnes & Noble CEO, in the company’s earnings news release. “We fully expect that our Retail and NOOK Media businesses will continue to have long-term, successful business relationships with each other after separation.”

Microsoft owns a 17 percent stake in the Nook Media business as a result of the $300 million investment made by the Redmond company when it settled a major patent lawsuit with Barnes & Noble two years ago.

The partnership between the two companies hasn’t worked out as planned, with Barnes & Noble recently announcing plans to partner with Samsung on a co-branded Nook tablet. The move to make the Nook business a standalone public company could give Microsoft an opportunity to reduce or sell off its stake.

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