Microsoft announced that it will make a $300 million investment in Barnes & Noble. This will allow the book retailer to better compete with Amazon, while Microsoft will gain a foothold in the business of e-books and college textbooks.
This deal will see Microsoft and Barnes & Noble’s create a subsidiary for the e-book and college textbook businesses, with Microsoft taking a 17.6 percent stake. The companies said Monday that they are exploring separating the Nook e-book business subsidiary entirely from Barnes & Noble, provisionally dubbed “Newco”.
Microsoft will own a company that sells tablet computers based on rival Google’s Android OS. A Nook application will release for Windows 8 tablets this Fall, though Nook software will continue to be available on the iPhone.
“We have been circling the relationship for quite a long time,” added Microsoft president Andy Lees. “When you think of different types of reading and what’s going to happen when that goes digital, it’s really quite dramatic to be bringing that to Windows customers.”
The Nook has managed to take up about a quarter of e-book sales, reducing the share of Amazon’s Kindle to around 65 percent. “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,” said Michael Norris, an analyst at Simba information.
Source: AP
