Barnes & Noble (NYSE:BKS) has cut prices for its flagship NOOK GlowLight e-reader heading into the holiday period to try and give it a leg up over Amazon's (NASDAQ:AMZN) Paperwhite and Voyage Kindle readers. The bookseller has also temporarily cut prices on its NOOK tablet, the Samsung (NASDAQOTH:SSNLF) Galaxy Tab 4 NOOK 7- and 10-inch, for what it's calling "Discovery Weekend," the Friday through Sunday before Thanksgiving. 

The GlowLight's new $99 price makes it cheaper than Amazon's Paperwhite, which costs $119 for the "special offers" version that includes ads and $139 for the ad-free model. Both readers offer 6-inch lit screens. The GlowLight is the only model shown on Barnesandnoble.com while Amazon offers a basic, nonlit Kindle at $79 with special offers and $99 without. Amazon is also offering $40 off Kindles when a customer adds a new $99, one-year Prime membership through Nov. 26. The retail giant also sells the Voyage, a $199-$219 e-reader that it positions as a premium device "passionately crafted for readers."

The tablet prices are less intriguing since $149.99 for the 7-inch Galaxy Tab 4 NOOK (after a $50 instant rebate) makes it more expensive than the entry-level 7-inch Kindle Fire tablet at $119. and well more than the 6-inch Kindle Fire at $199. Charging $249.99 for the 10-inch version (after a $100 instant rebate) may be more enticing as Amazon's closest comparison is the 8.9 inch Fire HDX at $349.99. 

Overall it's an aggressive strategy which Barnes & Noble certainly needs if it has any hope of winning back the customer base it has lost to Amazon. It remains to be seen however if anything short of giving customers a NOOK for free will help shift audience back to the bookselling chain. 

Nook

The NOOK GlowLight. Source: Barnes & Noble 

How bad is the NOOK business?  
Barnes & Noble has already announced its intent to spin off NOOK into a separate business by the first quarter of 2015, but if sales don't improve there may not be much to spin off. 

NOOK sales have been a disaster for quite a while now and they did not improve at all in the company's first quarter 2015, the most recent one it has reported on.  

The NOOK segment, which includes digital content, devices, and accessories had revenues of $70 million for the quarter, a 54.3% decrease from a year ago. Device and accessories sales were $18 million for the quarter, down 78.6% from a year ago, which the company blames on lower unit-selling volume. Digital content sales were $52 million for the quarter, a decline of 24.2% compared to a year ago, which is an inevitable side effect of lower device unit sales.   

The division's loss also climbed as well jumping to $50 million compared to $5 million in the year-ago period.

That follows a year in which NOOK sales fell 22.3% to $506 million for the full year despite the inclusion of a 53rd week, which the previous year did not have. That extra week added $9 million in additional sales in fiscal 2014, including $1 million in additional device and accessories sales and $8 million of additional content sales, the company reported

Is NOOK dead?
Amazon does not specifically say how many Kindle e-readers and Kindle Fire tablets it has sold but the number would certainly make the total NOOK business look like a rounding error. Barnes & Noble is being aggressive here, and the GlowLight specifically is a lovely product that matches up well with Amazon's Paperwhite, but it's hard to imagine a slightly lower price being enough to win customers from Amazon.

The problem is that e-readers require an account with a specific book store. You need a Barnes & Noble account for NOOK and and an Amazon account for the various Kindles -- and that's where Amazon has Barnes & Noble trumped.

In May, at its annual investor's meeting, Amazon CEO Jeff Bezos said the company has 244 million active customers, GeekWire reported. Amazon defines active customers as "accounts that have made a purchase in the past 12 months, so that means Amazon has valid credit cards on file for roughly that many people worldwide," according to the news site.

Barnes & Noble does not publicly declare the number of credit cards it has on file or the number of registered Barnesandnoble.com users, but it's a tiny fraction of Amazon's user base. That makes stealing customers from Amazon and KIndle almost impossible, It's not just an issue of registering and typing in a credit card, which is one hurdle. It's also the fact that if you already are a Kindle user your library of books does not travel with you should you switch to NOOK.

The book chain has an attractive offer for customers who don't own an e-reader or tablet and want one, but that's a tiny number of people. Over 50% of Americans already owned an e-reader or a tablet as of January, 2014, according to a Pew report, likely a large percentage of the people who want one, that leaves precious few people for Barnes & Noble to sell to.

Customers are not likely to switch from Kindle to NOOK and the number of new users who both want an e-reader or a tablet, but aren't already loyal Amazon patrons is just too small, Barnes & Noble is putting up a good fight, but it lost the war a long time ago.

Daniel Kline has no position in any stocks mentioned. The Motley Fool recommends Amazon.com. The Motley Fool owns shares of Amazon.com and Barnes & Noble. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.