Microsoft sure has been making the news quite frequently, and not all of it has to do with Windows or Xbox
. This week, the company is announcing a strategic partnership in a new Barnes & Noble subsidiary, which will reportedly "accelerate the transition to e-reading, which is revolutionizing the way people consume, create, share and enjoy digital content." It's interesting to think about this given that Microsoft itself killed a 'Courier' project a few years back that had the chance to eat the Kindle
's lunch (let alone the Nook), but now, Microsoft
is left to buddy up with companies still in that game in order to get a slice of the pie.
The new subsidiary will initially be called Newco, and it's expected to bring together the digital and College businesses of Barnes & Noble. Microsoft will make a $300 million investment in Newco at a post-money valuation of $1.7 billion in exchange for an approximately 17.6% equity stake. Barnes & Noble will own approximately 82.4% of the new subsidiary, which will have an ongoing relationship with the company's retail stores. B&N will obviously change the name at some point, but it makes us wonder why this news was rushed out without a name. Is something similar about to happen over at Amazon?
That aside, Microsoft is promising a Nook application for Windows 8, as well as Nook Study software. It's also important to note that both companies have settled their patent litigation (phew!), and moving forward, Barnes & Noble and Newco will have a royalty-bearing license under Microsoft's patents for its Nook eReader and Tablet products. Microsoft getting back into schools in a big way via eBooks? Yeah, we could see that.