Borders (NYSE:BGP) announced on Tuesday that it will shut down nearly half of its Waldenbooks stores, start its own online bookstore (ending its affiliation with Amazon.com), possibly sell most its overseas locations, and launch a new concept store format in 2008. The company is currently at work on a prototype, but said that it would be working harder to better tailor the stores to suit local markets.

Here are some of my thoughts on their plans:

- Competing with Amazon.com probably won't work. Amazon (NASDAQ:AMZN) lost money for years before it was able to turn online book selling into a profitable business, and has a huge competitive advantage over Borders in selling books online. I can't even imagine what Borders will do to compete with Amazon, and it just doesn't seem like it will work.

- The company's efforts to revamp its stores may be more promising. The ones that I've been in aren't particularly attractive, and Borders could do far more to create a bookstore vibe. I would advise them to look around some of the small, independent bookstores that are doing well and look for ways to capture that mood. Their existing stores have a big-box feel to them, and that is always a bad thing for a bookstore. Perhaps the new look will change that and, if it does, it could save the company.

In all, I think Borders will sink or swim as a brick-and-mortar bookstore and would do well to focus its efforts there, and leave the online business to Amazon.