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The Nook has been a crucial component of that strategy. And while it has sold well and drawn praise from reviewers, Barnes & Noble has acknowledged that the Nook has not been profitable, leaving investors anxious about the future costs tied to it, with the need to develop new software and hardware and to advertise the products. By one analyst’s estimate, Barnes & Noble spends $200 million to $250 million annually on its Nook operations.
“The Nook business has been a growth business for Barnes & Noble,” said Sarah Rotman Epps, a senior analyst with Forrester Research. “But there’s no doubt that continued growth and international expansion will take sustained investment that Barnes & Noble shareholders will not have the patience for.”