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Barnes & Noble looking for third party to rescue Nook tablet

Barnes & Noble is looking to hand its struggling Nook tablet division to a third party, the retailer has announced.

The Nook segment - which includes devices, digital content, and accessories - earned $108 million (£70 million) during the quarter and $776 million (£503 million) in the last year, down 34 per cent and 16.8 per cent, respectively.

In an effort to stop bleeding money, Barnes & Noble plans to continue development of its e-reader devices, but will farm out its tablet line to a yet-to-be-announced third-party manufacturer.

"We are taking big steps to reduce the losses in the Nook segment, as we move to a partner-centric model in tablets and reduce overhead costs," B&N CEO William Lynch said in a statement. "We plan to continue to innovate in the single purpose black-and-white eReader category, and the underpinning of our strategy remains the same today as it has since we entered the digital market, which is to offer customers any digital book, magazine or newspaper, on any device."

News reports are dropping Microsoft's name as the mysterious force set to take over the Nook tablet lineup, which makes sense, since Redmond invested $300 million (£194 million) last year for a 17.6 per cent stake in the Nook business. The firms' newly formed venture, Nook Media, debuted in early October.

B&N will continue building its digital library, citing a 16.2 per cent increase in digital content sales over the year (though an 8.9 per cent drop for the quarter), and add thousands of e-books every week and new Nook apps.

The company plans to hang onto its Nook HD and Nook HD+ inventory through the holiday season, hoping to sell off the last of them during the shopping rush.

Barnes & Noble has been struggling for some time to compete against Amazon's Kindle lineup and other 7in tablets, not to mention the Apple iPad mini.

In February, Barnes & Noble founder Leonard Riggio said he wanted to purchase the company's retail business, and leave behind its floundering Nook division, which debuted in late 2009.