Microsoft and Barnes & Noble team up for Nook spinoff

Microsoft has announced a major new partnership with bookseller Barnes & Noble that will see the company's Nook tablet and eReader business spun off to form a new company. The press release reveals that Microsoft will invest $300 million in the new venture which will give it a 17.6 percent stake in the company.

This new organization does not yet have a name, but for the moment it is being referred to by the working title Newco. The entire business, which will also include Barnes & Noble's College division, will be worth about $1.7 billion. Microsoft said one of the first things that will come out of this partnership will be a Nook application for Windows 8.

Barnes & Noble had previously been engaged in a patent dispute with Microsoft over the Nook products. That dispute has now been resolved with Barnes & Noble being granted a royalty-bearing license with Microsoft as part of this new partnership. Andy Lees, President of Microsoft, said of the new venture:

The shift to digital is putting the world’s libraries and newsstands in the palm of every person’s hand, and is the beginning of a journey that will impact how people read, interact with, and enjoy new forms of content. 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. We’re at the cusp of a revolution in reading.

This move by Microsoft puts the company in more direct competition with Amazon's Kindle business as well as Apple's iBook division.

The press release does state near the end that it is not 100 percent guaranteed that Barnes & Noble will actually spin off its Nook business, stating, "There can be no assurance that the review will result in a strategic separation or the creation of a stand-alone public company, and there is no set timetable for this review."

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I presume those investors who doomed the rumored spin off in January, sending the shares down 20% in one day, then bought some shares whilst they were cheap - in fact probably the same people pumping the high hell out of them now?

We officially need a Periodicals HUB Microsoft! I'd want one where you can aggregate all of your books and digital magazines to a single hub like the Music and Video Hub. Make a panorama with History, New, Apps, and Favorites and you will have a completely superior system for managing Books and Magazine apps on your phone. You could even treat it like a podcast so you can keep the most recent number of issues for each subscription.

While you are at it, create a News and Information hub and a Maps Hub that does the same for GPS, Weather, and integrates the Location Scout info. Make it extensible so Deals/Sales for local stores can be added through the Apps you specify/filter.

bushbrother said,
Why does the lady in the picture look like she is about to cry? lol.

Whoa, I didn't see it coming. Good detective !

Everyone talk about it's also been announced that there'll be a Windows 8 Nook application via Twitter and Facebook. Awesome ! It look like Nook dump Android for Windows 8 Apps

calimike said,
Everyone talk about it's also been announced that there'll be a Windows 8 Nook application via Twitter and Facebook. Awesome ! It look like Nook dump Android for Windows 8 Apps

If they move Nook from Android, it will be a huge win for Microsoft (Which at this point would be a reasonable thing to expect).

Partnership = successful extortion. That's what I read when I see these Microsoft press announcements. It's about time the DOJ looked into this Microsoft practise of forcing companies to be subservient using patents.

simplezz said,
Partnership = successful extortion. That's what I read when I see these Microsoft press announcements. It's about time the DOJ looked into this Microsoft practise of forcing companies to be subservient using patents.

Id be subservient to MS for a "$300 million" investment.
Dont be so naive. Both companies gained out of this.

simplezz said,
Partnership = successful extortion. That's what I read when I see these Microsoft press announcements. It's about time the DOJ looked into this Microsoft practise of forcing companies to be subservient using patents.

They have every right to protect their patents, if you dont want to pay, dont use their technology, simple.

simplezz said,
Partnership = successful extortion. That's what I read when I see these Microsoft press announcements. It's about time the DOJ looked into this Microsoft practise of forcing companies to be subservient using patents.

Really?

simrat said,

They have every right to protect their patents, if you dont want to pay, dont use their technology, simple.

Exactly. I love these "everything should be free unless I own it" people...

M_Lyons10 said,

Exactly. I love these "everything should be free unless I own it" people...

I found it funny that this guy likes OSX and apple, but hate MS with passion. Atleast MS dont try to kill other companies products, they just ask for money if you want to use their tech. Cant blame him though, its common in FOSS community.

simplezz said,
Partnership = successful extortion. That's what I read when I see these Microsoft press announcements. It's about time the DOJ looked into this Microsoft practise of forcing companies to be subservient using patents.

not even close. As a former BN employee, I can promise you that they got themselves into a place they didn't want to be when they came out with the nook: a tech support company. If they can outsource the tech part of readers to ms and focus on their core product- books, its a win win situation.

M_Lyons10 said,

Exactly. I love these "everything should be free unless I own it" people...

That's a creation of the internet, now because it's so easy to get most of what you want for "free" the masses think they're entitled to it from birth.

I just saw on @BreakingNews about this one !

Microsoft to invest $300 million in new venture with Barnes and Noble around Nook and College businesses via @TechCrunch http://tcrn.ch/Km3Ec4

Barnes & Noble and Microsoft will host an investor call and webcast beginning at 8:30 A.M. ET on Monday, April 30, 2012. To join the webcast, please visit: http://www.barnesandnobleinc.com/webcasts.

90 minutes to go 'til Live call at 5:30 AM PT

Update from Bloomberg TV: Microsoft will have a 17.6% stake in a new subsidiary for the businesses and more news incoming...

Edited by calimike, Apr 30 2012, 11:14am :

TheDisneyMagic said,
I was not expecting to hear that.

I kinda was. Well maybe not with B&N, but at least somewhere in the e-book market. At this moment, Microsoft is behind on the e-book front compared to Apple, Amazon, and Google and a unified library for e-books would be helpful in adding even more feature sets for Windows.

Plus this deal helps them reach out to the college crowd, where Microsoft has a lot of trouble. B&N operates many 'official' college campus bookstores (including mine, with noticieably outrageous prices) and thus those stores are kind of part of campus life. Outside of Xbox and Office, Microsoft has still a ways to go if they want many young people to like them. Kids are still pushing to get Macs, and the only techie store on campus sells mostly Apple laptops and iMacs and even iPads, while they have one or two lame HP/Dell laptops for display. Gmail is generally the de facto e-mail of choice for most people it seems, as well as for student organizations (though I still find occasional users of Hotmail/Yahoo!). Plus many more students appear to have PS3's/Wii's b/c we're too cheap to pay the Gold pass.

Having a connection to the e-book market and the college demographic are great ways for Microsoft to get back in the game.