Microsoft, B&N Join Forces on E-Book Business
The software giant will invest $300 million in the Nook, giving it a better chance to compete with the Kindle and iPad.
| Posted Monday, April 30, 2012, at 3:05 PM
Microsoft is shelling out $300 million for a minority stake in Barnes & Noble's e-book business, the two companies announced Monday.
The Associated Press explains that the deal gives Microsoft 17.6 percent of a new B&N subsidiary, which will include the bookseller's Nook and college-text business. (The new division is currently being called Newco while execs settle on what we're guessing will be a slightly-more-catchy name.) For Barnes & Noble, meanwhile, the deal means a much-needed cash infusion to help it compete in an e-book market that is currently dominated by Amazon's Kindle and, to a lesser extent, Apple's iPad.
As part of the e-book collaboration, Barnes & Noble will create an application for Microsoft-powered smartphones and computers, and the companies will share e-book revenues. Microsoft said it will feature the Nook application on its Windows 8 tablets that are due out this fall.
The Wall Street Journal reminds us that Monday's deal comes in the wake of a legal feud between Microsoft and Barnes & Noble last year in which Microsoft accused the Nook-maker of patent infringement. At the time, the bookseller said that Microsoft was acting as a "bully" to smaller outlets that were using the Android operating system. The two companies have since settled the dispute.
While Microsoft launched its original e-book business back in 2000, it was largely unsuccessful, mostly due to the company’s inability to create a large enough online library. You can read more on the deal—including why it may be a gamble for Microsoft—over at the Wall Street Journal.
