.NET News Desk
Microsoft Buys into Nook Business
Microsoft is investing $300M in a new Barnes & Noble subsidiary that is called Newco for the moment and is valued at $1.7B
By: Maureen O'Gara
May. 1, 2012 08:00 AM
Microsoft and Barnes & Noble have struck a strategic deal that will end their patent litigation and put the substantial Barnes & Noble e-book library including college textbooks on Windows 8.
Microsoft is investing $300 million in a new Barnes & Noble subsidiary that is called Newco for the moment and is valued at $1.7 billion.
Microsoft will have 17.6% of the unit, which may or may not be spun off.
Barnes & Noble will pay Microsoft an unsung royalty for a patent-settling license that covers its Nook e-readers, which are based on a forked version of Android.
Windows 8 will get a Nook application, giving Microsoft a chance to play catch-up with Amazon and Apple.
Barnes & Noble's digital bookstore has one of the world's largest digital catalogues of e-books, magazines and newspapers. Windows 8 should give Barnes & Noble an international push.
Newco's valuation is more than double Barnes & Noble's pre-announcement valuation.
Barnes & Noble said it currently has no plans to sell Windows 8 widgets in its retail stores. There is a Nook application available for iPad.
Nook has been running at a substantial loss because of the investments Barnes & Noble has been making in it. The Nook devices and content however have been moving a nice clip, up 32% to a total of $420 million.
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