Barnes & Noble teams up with Microsoft, splits off NOOK & College
Is this the end of the chain bookstore as we know it?
Quite possibly (sorry, Books-A-Million…I’m not ignoring you but you do feel different than a Borders, Barnes & Noble, Waldenbooks, Crown Books).
Since this story is (largely) about books, it may take an hour or two before you see it on the news, but this really is a big story.
I don’t see the press release on the Barnes & Noble website yet…I’ll link it when it shows up there. I’ve only gotten it as an e-mail.
Here is the key thing:
“The new subsidiary, referred to in this release as Newco, will 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. Barnes & Noble has not yet decided on the name of Newco.”
Boom! Microsoft pumps a bunch of cash into Barnes & Noble.
One of the very interesting parts will be what that “ongoing relationship” with the retail stores will be.
Sure, NOOK software will be quickly available for Windows 8. That opens up many more users for B&N (although Windows users generally may already be using the Kindle app and the B&N reader app).
This may worry some of you:
Andy Lees, President of Microsoft said:
“Our complementary assets will accelerate e-reading innovation across a broad range of Windows devices, enabling people to not just read stories, but to be part of them. We’re on the cusp of a revolution in reading.”
If you don’t want your reading revolutionized, sorry. 😉
I want to get this out to you right away, but I do expect the story to develop a great deal over the course of the day. What is it going to mean for Amazon and Apple? For Book-A-Million? For independent bookstores? It will be intriguing to watch stock movements today.
The news will solidify when B&N and Microsoft host a webcast at 8:30 AM Eastern Time this morning (about 45 minutes away as I write this).
That’s probably when it will break.
Update: the press release is on the B&N site now:
The same press release is on the Microsoft site:
Update: Yes, the story has broken:
Update: I thought I’d give you a little background on two parts of this.
First, something that’s involved is Microsoft having sued Barnes & Noble. That was announced on March 21 of 2011:
The basics of the claims have to do with the Android system allegedly infringing on Microsoft’s patents.
gives you a pretty good overview.
Those suits can go on for a very long time, and this was still progressing.
This deal settles the legal situation between the two of them. It might seem odd that Microsoft is paying the money if it was the one suing. B&N may be paying them money for using the patents, which may make the amount that Microsoft pays effectively less.
The other thing is that Microsoft used to sell e-books.
They had a .lit (short for literature) format, which they introduced in the year 2000, and which they were phasing out. I wrote about it in this
Microsoft may have just been too far ahead of the game. In 2000, e-books were obviously used mostly on computers…we didn’t have tablets and EBRs (E-Book Readers).
They still have an active website
Microsoft was allowing people to download the application until August 30th of this year, although materials basically had stopped being sold on November 8th of 2011.
That’s both good and bad, in my mind. It shows that Microsoft was interested in books a long time ago (in tech years), and may still have people with experience (even though it may be largely run by B&N).
The bad news shows a willingness to abandon a format in the commercial market…
As always, I’m interested in your opinions on this. Feel free to comment on this post.
This post by Bufo Calvin originally appeared in the I Love My Kindle blog.