Microsoft to invest $300M in Barnes & Noble's Nook e-book platform

Posted:
in iPad edited January 2014
Microsoft announced on Monday that it will take a $300 million stake in bookseller Barnes & Noble's digital Nook e-book business, potentially paving the way for a new spin-off company.

The new partnership will create a subsidiary that will include not only the Nook business, but also Barnes & Noble's college textbook business as well, according to The Associated Press. The deal also means Barnes & Noble will create a Nook application for Windows 8, much like the company's existing e-book offering for Apple's iPhone and iPad.

Both companies also revealed that they are exploring the possibility of spinning off the e-book and college businesses, which could result in a stock offering or sale.

The partnership places Microsoft in the midst of the e-book business where Barnes & Noble has already been competing with Apple's iBookstore and the Amazon Kindle platform. Apple also increased its push for digital textbooks earlier this year, with the release of iBooks 2 for iOS.

Barnes & Noble also offers education-focused content with its own Nook Study software. That, along with its college booksellers business, will now fall under the umbrella of the new subsidiary, in which Microsoft has a $300 million stake.

"Our complementary assets will accelerate e-reading innovation across a broad range of Windows devices, enabling people to not just read stories, but to be part of them," said Andy Lees, president at Microsoft. "We're on the cusp of a revolution in reading."

Nook


Lees was formerly the head of Microsoft's Windows Phone division, but was pulled from that role last December. Microsoft CEO Steve Ballmer said in a memo at the time that he had asked Lees to work in a new, "time-critical" role "focused on driving maximum impact in 2012 with Windows Phone and Windows 8." He said the change would allow Microsoft to "really deliver" the potential Microsoft has with both Windows 8 and Windows Phone.

Though it still operates brick-and-mortar stores that sell hard copies of books, Barnes & Noble has attempted to shift its business to the digital world, selling the Nook e-reader hardware and also offering e-books through its Nook platform on a range of devices. The company lags behind Amazon's Kindle platform, which similarly offers the Kindle e-reader hardware and multi-platform e-book software.

"The formation of Newco and our relationship with Microsoft are important parts of our strategy to capitalize on the rapid growth of the Nook business, and to solidify our position as a leader in the exploding market for digital content in the consumer and education segments," Barnes & Noble CEO William Lynch said.
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Comments

  • Reply 1 of 56
    gatorguygatorguy Posts: 20,741member


    In addition Microsoft has offered B&N a license to the supposed IP that they claimed the Nook infringed on. As an educated guess Microsoft wasn't willing to take a chance with the patents they've thrown at Android licensees being invalidated. That was a distinct possibility as Barnes & Noble had some surprising success at standing up to MS while most of the others taking licenses had just rolled over.


    http://www.groklaw.net/articlebasic.php?story=20120207110012776

     

  • Reply 2 of 56
    MacProMacPro Posts: 18,293member
    I have to chuckle at MS some times. The statement, "we are on the cusp of a revolution in reading" is so indicative of their 20th century mindset. They must live in a perpetual state of denial of reality. They believe PCs still are cutting edge and the world is waiting with bated breath for the release of 'Lipstick on a Pig', Aka Windows 8.

    Someone needs to equip a few of them with a few iPads and let them see where the cusp actually is in 2012.
  • Reply 3 of 56


    This should be logged under, "Grasping At Straws".


     


    B & N, you had a chance with the Nook. Now...

  • Reply 4 of 56
    zoolookzoolook Posts: 657member


    At first glance, this looks like just another Microsoft epic fail... but thinking about it, this is actually huge. It'll be interesting to see where they land in terms of agency Vs wholesale. I am guessing the former, given Barnes and Noble is a brick and mortar book seller. Might be bad news for Amazon.

  • Reply 5 of 56
    rogifanrogifan Posts: 10,669member
    "We're on the cusp of a revolution in reading." LOL. I'm sure they've got Amazon spooked.

    No doubt it will get positive media spin. I swear Microsoft is paying some of these tech writers and analysts good coin with all the pimping of Windows 8 they're doing. There's an article on thestreet.com this morning titled: How Microsoft is Scaring Apple. Yes I'm sure is quaking in their boots over Windows 8.
  • Reply 6 of 56
    vandilvandil Posts: 187member


    I'll have to admit, Microsoft's own .LIT format for ebooks (late 90s) was way ahead of its time, so they've been looking at ebooks for some time.  That, combined with their failed "courier" hardware, it's clear MS has had lots of mistimings and false starts with ebooks.


     


    Buying into Nook was a no-brainer.  B&N is a strong third place competitor on the field.  Now you will see Nooks marketed to businesses and educational markets and even in Microsoft Stores.  MS-oriented IT people looking for a tablet will now consider the Nook, even better if the MCSE books are available on the platform, among other MS references.


     


    This has potential.  Competition with Kindle and iPad and good things for everyone.

  • Reply 7 of 56
    zoolookzoolook Posts: 657member


     


    Quote:

    Originally Posted by Rogifan View Post



    "We're on the cusp of a revolution in reading." LOL. I'm sure they've got Amazon spooked.

    No doubt it will get positive media spin. I swear Microsoft is paying some of these tech writers and analysts good coin with all the pimping of Windows 8 they're doing. There's an article on thestreet.com this morning titled: How Microsoft is Scaring Apple. Yes I'm sure is quaking in their boots over Windows 8.


     


    MS have a reputation for not giving up on things. If someone had said in 2000, or 2001 that MS should be "afraid of Apple", they'd have been laughed at. Who's laughing now?


     


    I don't think this is a bad thing for the industry; Amazon certainly needs some more competition.

  • Reply 8 of 56
    gatorguygatorguy Posts: 20,741member


     


    Quote:

    Originally Posted by Zoolook View Post


    At first glance, this looks like just another Microsoft epic fail... but thinking about it, this is actually huge. It'll be interesting to see where they land in terms of agency Vs wholesale. I am guessing the former, given Barnes and Noble is a brick and mortar book seller. Might be bad news for Amazon.



     


    If anything the partnership probably has Apple more in mind than Amazon. With Apple recently indicating a desire to see it's iPad become a de-facto digital textbook, MS is serving notice that they don't intend to sit back and watch Apple gain traction in education while MS twiddles their thumbs.

  • Reply 9 of 56
    rogifanrogifan Posts: 10,669member
    Is this one of the reasons Apple's stock is down over 2% so far today? How many days now in the past two weeks has Apple's stock been up? 1 or 2?
  • Reply 10 of 56
    rommelrommel Posts: 3member


     


    Quote:

    "Our complementary assets will accelerate e-reading innovation across a broad range of Windows devices, enabling people to not just read stories, but to be part of them," said Andy Lees, president at Microsoft.


     


    Only if the story is a tragedy.

  • Reply 11 of 56


     


    Quote:

    Originally Posted by Rogifan View Post



    Is this one of the reasons Apple's stock is down over 2% so far today? How many days now in the past two weeks has Apple's stock been up? 1 or 2?


     


    Naw... AAPL was bound to go down after going up $50 in one day on a quarterly that was a tad weak in the future forecast.

  • Reply 12 of 56
    maccherrymaccherry Posts: 924member


    Well, that seems like money well wasted.

  • Reply 13 of 56
    addaboxaddabox Posts: 12,660member


     


    Quote:

    Originally Posted by Gatorguy View Post


     


     


    If anything the partnership probably has Apple more in mind than Amazon. With Apple recently indicating a desire to see it's iPad become a de-facto digital textbook, MS is serving notice that they don't intend to sit back and watch Apple gain traction in education while MS twiddles their thumbs.



     


    If MS had bought the Nook outright, and announced plans to rapidly iterate the software into a Metro app with Nook based, stripped down Metro ebook readers to follow, then yeah.


     


    As it is, not so much.  They'll have another (largely redundant) library of ebooks available on Win8 and.....?  It's just a 17% stake in the spun off Nook, not really jumping in with both feet, is it?  And nothing short of jumping in with both feet, with a really compelling ebook solution, is going to make a dent in the Amazon/iOS juggernaut.  Apple has made ebooks a central part of iOS, with iBooks Author a major bid to grab a chunk of the electronic textbook market.  No auxiliary devices, no parallel development tracks, no partnerships, no "synergy."  Just a simple to grasp, iOS gets you this on these devices.  MS hooks up with the third place vendor and announces..... something?  How is that even much better than "twiddling their thumbs"?

  • Reply 14 of 56
    nasseraenasserae Posts: 3,157member


     


    Quote:

    Originally Posted by Gatorguy View Post


     


     


    If anything the partnership probably has Apple more in mind than Amazon. With Apple recently indicating a desire to see it's iPad become a de-facto digital textbook, MS is serving notice that they don't intend to sit back and watch Apple gain traction in education while MS twiddles their thumbs.



     


    No it is not against Apple nor Amazon. This is a direct blow against Google. MS is pulling Android from under Googles feet. Guess what search and cloud services will be on the Nook now?

  • Reply 15 of 56


    Hmmmm. Given M/soft's track record with partners I would have felt bad for B&N, who have supported well my reading fixation over the years. Since it is only a stake in the spin-off, it might just have a chance. B&N gets the money to get it up and on it's feet, M/soft gets the Nook app for Win8Metro platform. Both wins. It remains to be seen if the new company can survive living under Google's and Amazon's shadows, iBooks isn't a big concern at the moment.


     


    I'm sure they are also watching the FTC litigation against the publishers and Apple - if the FTC fails to make their case, it will be a setback for Amazon and gives the Newco folks a leg-up on competing, by disarming Amazon's effective monopoly.

  • Reply 16 of 56


     


    Quote:

    Originally Posted by digitalclips View Post



    I have to chuckle at MS some times. The statement, "we are on the cusp of a revolution in reading" is so indicative of their 20th century mindset. They must live in a perpetual state of denial of reality. They believe PCs still are cutting edge and the world is waiting with bated breath for the release of 'Lipstick on a Pig', Aka Windows 8.

    Someone needs to equip a few of them with a few iPads and let them see where the cusp actually is in 2012.


     


    Pretty closed minded, no?. The e-reader market is huge, iPad isn't the answer to everything. There's plenty of people that don't want all the noise of a tablet and just a nice e-reader. I know people WITH iPads that would rather read e-ink for long stretches rather than LCD. What's next, chuckling at people who enjoy reading physical books too?

  • Reply 17 of 56
    rogifanrogifan Posts: 10,669member
    <p>  </p><div class="quote-container"> <span>Quote:</span> <div class="quote-block"> Originally Posted by <strong>Rogifan</strong> <a href="/t/149735/microsoft-to-invest-300m-in-barnes-nobles-nook-e-book-platform#post_2102932"><img alt="View Post" class="inlineimg" src="/img/forum/go_quote.gif" /></a><br /> <br /> Is this one of the reasons Apple's stock is down over 2% so far today? How many days now in the past two weeks has Apple's stock been up? 1 or 2?</div></div><p>  </p><p> Naw... AAPL was bound to go down after going up $50 in one day on a quarterly that was a tad weak in the future forecast.</p>
    But after having been down 12% the previous 2 weeks or so. I don't think I'm the only one scratching my head at the wild swings in Apple's stock. Though I suppose the NY Times hit piece over the weekend might have something to do with today's slide.
  • Reply 18 of 56


    I love AppleInsider but covering the above Microsoft story while apparently pretending the following MS story doesn't exist is a bit self-serving.


     


    http://www.eweek.com/c/a/Mobile-and-Wireless/Wozniak-Windows-7-Phone-More-Beautiful-than-iPhone-857635/

  • Reply 19 of 56


    Once again MS is following the MT ("Me Too") business model and is, once again, so far behind the curve they have no hope of catching up.  


     


    Company that was once great but now failing (i.e. Nokia)?  Let's buy in, get in the game and in no time we'll be #1!  


     


    B&N is on the road to bankruptcy and MS invests $300MM.  


     


    Steve Balmer is still alive and well!


     


    Just sad.

  • Reply 20 of 56


     


    Quote:

    Originally Posted by digitalclips View Post



    I have to chuckle at MS some times. The statement, "we are on the cusp of a revolution in reading" is so indicative of their 20th century mindset. They must live in a perpetual state of denial of reality. They believe PCs still are cutting edge and the world is waiting with bated breath for the release of 'Lipstick on a Pig', Aka Windows 8.

    Someone needs to equip a few of them with a few iPads and let them see where the cusp actually is in 2012.


     


    I love it. LOL! image

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