Microsoft And Barnes & Noble Strike Nook-Related Partnership
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.