Barnes & Noble is keeping its Nook Media digital business after all.
The bookseller had planned to combine Nook and its college bookstores into a single company separate from its retail operations.
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Barnes & Noble's retail operations, which include its bookstores and the BN.com business, have been outperforming Nook. Barnes & Noble spent years investing heavily in its Nook e-book reader and e-book library, but they struggled to be profitable.
The biggest U.S. brick-and-mortar bookseller said Thursday that keeping Nook and the retail operations together would better serve digital customers.
The separation is expected to be finished by August's end. Barnes & Noble Education, a separate, publicly traded company, will house the college business.
Shares of Barnes & Noble Inc. surged $1.73, or 7.1 percent, to $25.98 in morning trading.