Barnes & Noble (NYSE: BKS) is making an aggressive move in the ongoing battle for e-reader dominance and in the ongoing battle for the company's very survival, by offering two versions of its popular Nook readers at deep discounts. The more hands the company can get the device into now, the better off it will be in the future. The question is, can it make it through the now?

Buy a little of this, get a lot of that
Customers who purchase a one-year Nook subscription to The New York Times will be able to buy the Nook Color for $99, down from $199. Alternatively, they can get the Nook Simple Touch, the black and white version, for free, down from the normal $99.

Customers will be able to avail themselves of these offers at any of the company's retail locations, or online. The offers are good through March 9, 2012. The subscription to The New York Times is digital access only and costs $19.99 per year.

Digging itself out, or digging deeper?
B&N is in trouble. Though the most recent quarter has shown significant improvement, for the past three the company has been operating in the red, losing more and more ground to its primary nemesis, online-retailing behemoth Amazon.com (Nasdaq: AMZN).

B&N's deep-discount, e-reader move is similar to Amazon's Kindle strategy; that is, sell the hardware at cost, or maybe even at a loss, to draw consumers into the companies' proprietary products-and-services ecosystem, where the real money is. But there are important differences between the two companies' approaches.

First, Amazon may be selling its Kindles at cost, or even at a small loss, but it's not giving the equipment away and therefore taking a total loss on it. This might be too big of a pill for the already struggling B&N to swallow.

Second, Amazon's Kindle Fire, its upper-end model, straddles the line between e-reader and full-on tablet computer. The Kindle Fire, in fact, is now viewed as a potential rival for Apple's groundbreaking and immensely popular iPad. The jury is still out as to whether the Kindle will in fact challenge the iPad's dominance in the market, but the Nook Color isn't even in the running.

That light at the end of the tunnel is a train
Also of note in recent Barnes & Noble news are definite plans to sell its publishing arm, Sterling Publishing, and possible plans to spin off the Nook business into its own separate entity. The Nook business is B&N's one remaining silver lining to the dark clouds of Internet commerce and digital publishing that have been hanging over its business for a decade now. Breaking it away from all the perceptual and financial baggage that is Barnes & Noble could unlock real value for the Nook brand and for investors.

That said, selling the Nook at such a deep discount is a Hail Mary pass for the company as it currently exists. Unless B&N finds some way to get into the full-on tablet game with the Kindle Fire and the iPad, even if it splits off Nook I think the company is in for a rough ride at best.

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