'Significant expansion' for Nook as Microsoft invests $300m

'Significant expansion' for Nook as Microsoft invests $300m

Microsoft has invested $300m in Barnes and Noble, forming “a new subsidiary” of the bookselling chain to include the store’s Nook, digital and college business.

The companies have announced the new “strategic partnership”, which aims to “accelerate the transition into e-reading", today (30th April). The new part of the business, 17.6% owned by Microsoft, is being given the holding name of Newco.

The partnership means that Microsoft customers internationally, as well as in the US, will be able to access the Nook e-book store through a Nook application for Windows 8.

William Lynch, c.e.o. of Barnes & Noble said: “The formation of Newco and our relationship with Microsoft are important parts of our strategy to capitalise on the rapid growth of the Nook business, and to solidify our position as a leader in the exploding market for digital content in the consumer and education segments.

“Microsoft’s investment in Newco, and our exciting collaboration to bring world-class digital reading technologies and content to the Windows platform and its hundreds of millions of users, will allow us to significantly expand the business.”

B&N is also highlighting the importance of combining its college business in Newco, which it says means more students and educators will be able to access the Nook Study software platform for the distribution and management of digital education materials.

Following its announcement in January that the company was exploring the strategic separation of its digital business in order to maximise shareholder value, B&N today said: “The company intends to explore all alternatives for how a strategic separation of Newco may occur. There can be no assurance that the review will result in a strategic separation or the creation of a stand-alone public company, and there is no set timetable for this review.”

Andrew Lees, president of Microsoft, added that the partnership was about expanding readers’ access to a global breadth of material.

“The shift to digital is putting the world’s libraries and newsstands in the palm of every person’s hand, and is the beginning of a journey that will impact how people read, interact with, and enjoy new forms of content,” he 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.”

Nook has long been rumoured to be partnering up with Waterstones in the UK to release an e-reader, which is expected to come within this calendar year.

The company has recently been busy signing up UK publishers to an international content agreement and sponsored at App Zone at this year’s London Book Fair.