Good move on MSFT's part. Could be...
The new company, referred to for the moment as Newco, will contain B&N’s digital business, as well as its College division. While Microsoft will take 17.6 percent, B&N will own 82.4 percent of the venture.
This is a key way of getting more content on to the Microsoft platform — specifically e-books content to ensure that its Windows 8 tablets will be able to compete not only against the best-selling iPad but also the Kindle Fire from Amazon, along with the rest of the company’s e-readers. The Kindle Fire has stolen a march among Android tablet makers and part of the compelling offer is not only the low price ($199) but also the fact that it contains so much content, including seamless access to all of Amazon’s e-book offerings.
This is also a progression — a very big one — of the funding etudes that Microsoft has been making to developers to make sure they are making apps for the Windows Phone platform, a way of getting more content on its platforms, which, it can be argued, may have come too late to the market. The first product to come out of the door? A Nook application for Windows 8, the companies say.
And given that education has been one of Apple’s bigger pushes this year, and the obvious and close links between education and e-reading, it’s not too surprising to see that B&N has also put its College division into this subsidiary. Microsoft, too, has been courting the education market — making its biggest-ever cloud-services deal in the education sector. Nevertheless they have a long road ahead of them. In January, Apple noted that there were already 20,000 educational apps for iOS and that there were already 1.5 million devices deployed in schools, numbers that will inevitably have grown in the last 4-5 months with the launch of the new iPad and numerous initiatives to spread the tablet in the educational sector.
And there is a legal twist to the deal, too: the two companies say they have definitely sorted out their patent litigation now: “Moving forward, Barnes & Noble and Newco will have a royalty-bearing license under Microsoft’s patents for its NOOK eReader and Tablet products,” the two write in the release below. If Microsoft doesn’t use this as an opportunity of possibly persuading B&N to swap over to Windows 8 for a version of the Nook, it will also give it a very interesting inroad into developing more for Android.
More: Microsoft Makes $300M Investment In New Barnes & Noble Subsidiary To Battle With Amazon And Apple In E-books | TechCrunch |
