As The Wall Street Journal reported it would this morning, Borders Group Inc. announced today that it will reduce its presence overseas and close almost half of its Waldenbooks stores. Borders will also launch a new online effort in 2008, when its current deal with online retail giant Amazon.com, inked in 2001, ends.

As WSJ reports, sales at U.S. bookstores fell 2.9% last year while book sales online now make up 13% of the book market, compared to 2% in 1998. Sales at Waldenbooks fell 6.3% during last holiday season, while they were down 1.9% the Borders super stores.

Reuters reports that “some industry analysts” think the struggles that both Borders and its main competitor Barnes & Noble are facing could result in a merger or buy-out between out. For

Michael Cairns has more commentary on Borders’ new strategy.