Trying to make their way through an adequately populated eBook market, is Microsoft Inc., who according to reports will be investing $605 million over a period of five years in Barnes & Noble Inc.'s Nook e-reader and college textbook business. With this move, Microsoft aims to gradually make its presence felt in the swelling tablet market, and also change things a bit as far as market domination is concerned, which is currently enjoyed by both Apple and Amazon with their respective iPad and Kindle Fire tablets. This move by Microsoft Inc. will also keep it ready in time for a major shift that the industry is to witness, as far as the market for downloadable college textbooks go. Barnes & Noble, reportedly will receive a boost in capital and also see the doorway to the digital books market outside the United States open, post the tie-up. The report adds "The new unit will be run and majority owned by Barnes & Noble and will maintain a relationship with the U.S. bookstore chain's nearly 700 stores."
Together with Barnes & Noble
Reportedly, Microsoft will be making an initial investment of $300 million, which will give the company a 17.6 percent stake in the newly created Barnes & Noble subsidiary, and over the course of 5 years, Microsoft will be investing another $305 million. The new unit, reportedly has been valued at $1.7 billion. The deal is being touted to be strategically crucial for both companies, despite it weighing lower, finance-wise. Barnes & Noble Chief Executive William Lynch was quoted as saying that the investment would largely go towards the funding of the international rollout of the Nook's digital bookstores and new reading software for the Windows platform.
Quoting Sid Parakh, an analyst at fund firm McAdams Wright Ragen, the report states that, “It's a good strategic deal.It gets Microsoft in the game for e-readers, and gives them access to a market that has been growing nicely and they've basically sat out of. It also makes Windows 8 a more compelling platform from an e-readers perspective.” The report further adds that the new deal will see the end of Microsoft's patent lawsuit against Barnes & Noble over the Nook, running on Google's Android platform, while also receiving royalties on those patents. It is also being speculated that future Nook models will be based on the Windows operating system.
Published Date: May 02, 2012 05:52 pm | Updated Date: May 02, 2012 05:52 pm