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.