Analyst: Retailers, be afraid of e-books

Barnes & Noble's recently announced that the $259 Nook e-book reader will undoubtedly drive short-term revenue, but the company may be shooting itself in the foot by offering a device that encourages people to stay out of the bookstore.

That's the view of several analysts, speaking in Crain's New York Business:

"As the math currently works, each sale through a Nook is not just unprofitable but potentially replaces a higher-margin sale at stores," Mr. Balter wrote in a client note Friday. One obvious risk is that downloading books reduces the need to go into stores, he said.

Goldman Sachs analyst Matthew Fassler wrote to clients Friday that the move to digital formats "clearly challenges Barnes & Noble's store-based model."

According to research by Forrester, 3 million e-book readers will be purchased in the United States in 2009, twice that many in 2010. That's 9 million devices that eliminate the need for customers to visit a bookstore.