Barnes & Noble is spinning off Nook, but what does that mean for Microsoft's investment in it?

Barnes & Noble has officially confirmed plans to spin off the company's Nook tablet and e-reader business, more than two years after it first announced plans to do so. As part of its 2012 plan, Barnes & Noble obtained a $300 million investment in Microsoft for the proposed Nook company, an agreement that may complicate the new spinoff plans.

In a press release issued today, Barnes & Noble said it plans to separate its primary book-selling and Nook units into two companies "by the end of the first quarter of [the] next calendar year." Barnes & Noble CEO Michael P. Huseby said the plan will help both Barnes & Noble and the impending Nook company by allowing them to focus on their strengths, though the two companies will likely operate closely together for the foreseeable future.

"We have determined that these businesses will have the best chance of optimizing shareholder value if they are capitalized and operated separately," he said in a statement included in the press release. "We fully expect that our Retail and NOOK Media businesses will continue to have long-term, successful business relationships with each other after separation.”

Tucked away at the bottom of the press release, Barnes & Noble states that its future outlook is "subject to certain risks," most of which are associated with the Nook spinoff. Listed in those risks are three potential issues involving Microsoft's investment in the company: that the new Nook company will "not achieve the expected benefits for the parties;" that it won't be able "to perform its obligations" of Microsoft's agreement; and that there could be problems "associated with the international expansion contemplated by the relationship with Microsoft, including that it is not successful or delayed."

The third risk is perhaps the most interesting, as it means there's some form of "international expansion" for Nook planned with Microsoft. It's long been rumored that Nook will release a Windows-powered tablet, though Barnes & Noble never indicated it had plans for such a device. After Microsoft invested in the company, Barnes & Noble announced it would release a Windows 8 app for its Nook digital bookstore, which was released in November 2012. Microsoft's investment never resulted in a Windows-powered tablet, however, as Nook-branded tablets continued to be released with Android instead.

In December 2012, educational company Pearson invested $89.5 million in Nook Media, which reduced Microsoft's share in the soon-to-be company to about 16.8 percent. Following that investment, there were rumors that Microsoft was interested in acquiring Nook Media, though later reports surfaced that it actually had no desire to own the business.

Source: Barnes & Noble | Image via Barnes & Noble

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