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Microsoft Ties Up with Barnes & Noble, Invests $300 Million Into NOOK Subsidiary

NOOK TabletWith their patent battles now behind them, Microsoft has teamed up with Barnes & Noble to spin its NOOK business into an as-yet unnamed subsidiary — and that 0 million investment will at the very least nab Redmond a cool NOOK app for Windows 8.

Microsoft and Barnes & Noble announced Monday morning “the formation of a strategic partnership” for a new subsidiary to the bookseller focused on NOOK e-readers and the college market. While the new venture is referred to as “Newco” in the press release, the formal name has yet to be decided.

The goal of the pairing is to “accelerate the transition to e-reading, which is revolutionizing the way people consume, create, share and enjoy digital content.” However, just a short time ago, the two companies were locked in a patent battle which has now been resolved, with Barnes & Noble and Newco receiving “a royalty-bearing license under Microsoft’s patents for its NOOK eReader and Tablet products.”

The mashup is a curious one, given that B&N’s NOOK uses a fork of the Google Android operating system. Microsoft is making a 0 million investment into Newco, which buys Redmond a 17.6 percent equity stake, with Barnes & Noble retaining 82.4 percent.

So what’s in it for Microsoft other than future income?

“One of the first benefits for customers will be a NOOK application for Windows 8, which will extend the reach of Barnes & Noble’s digital bookstore by providing one of the world’s largest digital catalogues of e-Books, magazines and newspapers to hundreds of millions of Windows customers in the U.S. and internationally,” the press release reveals.

Follow this article’s author, J.R. Bookwalter on Twitter



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