Microsoft gives $300 million to Barnes & Noble to fund new Nook subsidiary

Technology is expensive.

Microsoft recently granted Barnes & Noble $300 million to form a subsidiary dedicated entirely to the Nook. The Redmond-based corporation will have a 17.6 stake in the division, temporarily called “Newco,” which also incorporates B&N’s college textbook business.

The partnership is unexpected, since the companies were previously engaged in a lawsuit over supposed patent infringements associated with the e-reader. Their shared investment in Newco puts that feud to rest.

Perhaps Microsoft is considering its own agenda: “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,” Andy Lees, president of Microsoft, said. “We’re on the cusp of a revolution in reading.”

These days, e-readers are doing a lot more than storing books—they’re becoming multi-purpose devices, and that’s causing them to rise in price. The Nook Tablet, B&N’s most expensive model, costs $199. Compare that with the basic Nook Simple Touch, which is now priced at $79. Amazon offers a similar price range—the same at its lowest and highest ends, actually.

How much are you willing to pay for an e-reader, and how important are multimedia features to you? Reading will always be my top priority with these devices, but I do occasionally salivate over the glowing, full-color screens of better models.

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10 thoughts on “Microsoft gives $300 million to Barnes & Noble to fund new Nook subsidiary

  1. I have the Nook Simply Touch and only need e-readers for reading. There are so many devices out there that wants to connects us. But if we are always plugged into the internet, where are we finding the time to read? Where is our down time where we disconnected from technology? Expanding the e-reading business is good, if it going to drive the cost of e-books.

    I was very surprised when I read about this partnership between the two companies. This plan might be beneficial to both since Amazon has lost 4 out of the big 6 and might have to change the prices of their e-books.

    • Thanks for your input, Elizabeth! I’m sure Microsoft’s involvement stems from their competition with Sony and its Kobo, but I was surprised, too. I don’t doubt Microsoft plans to get the most out of the new deal.

  2. Solid post on this surprising partnership. Can only hope that competition benefits writers and readers but impossible to tell at this point yet I suspect the more versatile the device, the more popular, and it seems that, realistically, these devices must be more than just for reading. It is an exciting time.

    Karen

    • Thanks, Karen! I actually feel like these publishing rivalries could have a damaging effect on readers—comics are available “exclusively” on different devices instead of all, and publishers are reluctant to allow libraries e-books … I’m happy if these deals lead to wider availability, but the industry doesn’t seem to be there yet. Digital does make it hard—once you let something out there, it’s out there for good.

  3. Hmmmmm, interesting. To me, it feels like Microsoft sees another chance to take on Apple, and to a certain extent, Amazon. Perhaps Microsoft wants to take on the iPad? And B&N want to take on the Kindle Fire? It all feels like another “day late, dollar short” thing. Similar to all those iPhone copycat phones that came out after that became popular. And the tablets that came out after the iPad.

    Besides, whatever they’re up to is going to be even more technology thrown at us. I’m getting a little overloaded in that department so I doubt I’ll be interested in it unless it does my laundry and cleans out the litter boxes while I read.

    To answer your question, multi-media features on an e-reader aren’t necessary for me. I have zero interest in that. I have an iPad and an iPhone and computers for that if I want it. I also have a first generation Kindle that I love with all my heart. Obviously the iPhone gets used the most (the Kindle app on it does get used sometimes) but that old white Kindle of mine with no bells and whistles gets a whole lot more use than my iPad ever will. And if I were buying a new e-reader today, I’d pick up the $79 Kindle. Simplicity is what I want for my reading. In purchasing it, the delivery of it and the act of reading itself. I’d rather pay a higher price for e-books than waste money on more technology…

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