Tesco is to close its ebook-selling service as it admitted it had been unable to find a buyer, despite holding talks with Waterstones, Britain’s biggest chain of bookstores.

The supermarket, which has been selling off non-core businesses as part of a turnround plan unveiled earlier this month, said Blinkbox Books would close by the end of February. It declined to comment on why talks with Waterstones had failed.

Shares in Tesco have jumped 20 per cent this month after the company said it would cut head office costs, close stores and dispose of businesses including Blinkbox and Dunnhumby, the data analysis group that runs its Clubcard loyalty scheme.

Despite its failure to sell Blinkbox Books, Tesco has now disposed of the two other lossmaking businesses under the Blinkbox brand. The retailer sold Blinkbox Movies to TalkTalk this month, and on Monday it completed the sale of Blinkbox Music to Guvera, an Australian company that operates a music streaming service in 20 countries worldwide.

Waterstones declined to comment, but chief executive James Daunt previously told the Financial Times that its current ebooks platform was “antiquated” and that it needed a way to sell ebooks on a range of devices.

“Blinkbox is a modern platform that delivers books through an app, so that you can read them on any device that you wish to,” he said.

Blinkbox Books was created just over two years ago after Tesco acquired Mobcast, the digital book service, for £4.5m in September 2012. The division posted a pre-tax loss of £2m on sales of just £70,000, according to its latest financial statements for the year to February 2013.

Clive Black, analyst at Shore Capital, said that in comparison to Blinkbox Movies and Music, the books part of the business had made less of a mark on its sector. “Blinkbox Books had a very small customer uptake and there wasn’t much to sell,” he said.

Guvera revealed that 2.5m people have registered to use the Blinkbox Music app and said it had “built a loyal following of listeners” who consume about 100m songs a month.

Michael de Vere, Guvera’s global chief operating officer, said: “The acquisition of Blinkbox Music is an important new chapter in the Guvera story, adding significant firepower to our product — both in terms of technical expertise and an established and loyal audience in the UK.”