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May 01, 2012
Microsoft News - Microsoft Invests $300 in Barnes & Noble's Nook
By David Delony, Contributing Writer
The move will give Microsoft a 17.6-percent stake of $300 million in a new joint venture between the two companies, worth $1.7 billion. Bookseller Barnes & Noble's currently holds $791 million in capital.
In addition to marketing the e-book reader and e-books, including college textbooks, Microsoft will offer a Nook application as part of Windows 8. Microsoft is expected to release a preview version of their operating system software in June, with the full release coming later this year.
Windows 8 represents Microsoft's greater push to enter the tablet market, with a radically overhauled user interface optimized for touch screens. The new version also includes a storefront for applications similar to Apple's (News - Alert) and Google's online app stores. Windows 8 also has a reader for Amazon's popular Kindle e-books.
A test version of Windows 8, released in February, had about 100 apps in its Storefront, compared with over half a million available in Apple's store.
The deal came after a public feud between the two companies. Microsoft sued the bookseller and the Nook's manufacturers last year for alleged patent infringement. Barnes & Noble accused Microsoft of trying to “bully” companies using Android technology, which powers the Nook. The two companies have settled the patent case as part of the business deal.
Since Windows is the most widely-used desktop operating system, the venture will give Barnes & Noble more visibility in the e-book arena, especially internationally.
Barnes & Noble had said earlier that it considered spinning off the Nook operation into a separate company.
"The whole reason the Nook business is expanding so rapidly is because bookstores are committed to it and know how to market the product in that environment, Michael Norris, an analyst at Simba information, told Associated Press (News - Alert).
The book retail chain reported a loss in the third quarter of last year, apparently due to investment, including an aggressive holiday campaign. In terms of sales, however, their investment seemed to be paying off. Total digital sales for the company rose by 32 percent last year to $420 million.
Edited by Braden Becker
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