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Nook vs. Kindle: Microsoft Picks a Side the e-Reader Battle

Posted by Sheila Shayon on April 30, 2012 01:16 PM

Microsoft has invested $300 million in a digital venture with Barnes & Noble in a bid to make the bookseller's Nook e-reader available to millions of new customers, from consumers to students, through integration with the Microsoft's Windows 8 operating system. 

"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," commented Microsoft president Andy Lees to the BBC. "We're on the cusp of a revolution in reading."  

“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,” said Lees in a statement.

Microsoft gets a 17.6% share of the yet-unnamed joint venture, for now (Hulu-like) being called NewCo, with Barnes & Noble owning the remaining 82.4%. The deal includes Barnes & Noble’s College business and the company’s shares are up more than 80%, reaching $25, the highest level since 2009.

What a difference a few months make. In January, Barnes & Noble announced it was looking to spin off its Nook business, and was feuding with Microsoft over patent issues claiming the latter was trying to "monopolize" the portable reader market with their demands of royalties on devices using the Android operating system.

The Nook, of course, competes against Amazon.com Inc.'s Kindle and Apple’s iPad in the electronic book market. With Microsoft taking a stake in Barnes & Noble's Nook, it's getting a prime platform to showcase its Windows 8 operating system in a wider array of touchscreens and mobile devices. For B&N, it marks a game-changing investment by Apple's rival, one that Wall Street approves (B&N shares soared 83% this morning on the news — its highest surge ever.)

"Microsoft's investment in Newco [the new digital and college unit], 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," said Barnes & Noble CEO William Lynch. The partnership “will allow us to significantly expand the business which will extend the reach of Barnes & Noble’s digital bookstore by providing one of the world’s largest digital catalogues of e-books, magazines and newspapers to hundreds of millions of Windows customers in the U.S. and internationally.” 

It also gives Microsoft a bigger stake in the content/publishng world. Lynch affirmed: “Content lies [with Newco]. The relationships with publishers will be Newco relationships.” Book publishers will sign e-book contracts with the new company, and not Barnes & Noble. “We’ve always said we want readers to be able to read in the device of their choosing," he added, hinting at a sore spot with Amazon (publishing rights), so "if you want to read your book on an iOS product or Android product…you can of course do that.”

Comments

sweet People's Republic of China says:

E-book is more convenient, efficient, environmentally friendly

May 3, 2012 01:22 AM #

Kristian Amor United States says:

Good share! I hope more people will discover your blog because you really know what you're talking about. Can't wait to read more from you

May 3, 2012 04:16 AM #

Comments are closed

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