Microsoft has invested $300m (£185m) in a digital venture with US bookseller Barnes and Noble. Thedeal could make Barnes and Noble's Nook e-book reader available to millions of new customers, integrating it with the Microsoft's new Windows 8 operating system. The as-yet unnamed new company will be 82.4% owned by Barnes and Noble, with Microsoft getting a 17.6% stake.
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| Soon E-readers will be overtaken by tablets. |
The news caused the book store chain's shares to almost double.But some industry commentators believe publishers will be "terrified" at the implications of the deal."This deal with Microsoft could be the saviour of its digital division but won't help the bricks and mortar business," Tim Coates, managing director of Bilbary, an e-book content provider, told the BBC. "In fact it could accelerate its decline.
"Publishers will be terrified of Barnes and Noble going digital only." Barnes & Noble shares were up more than 80%, reaching $25, the highest level since 2009. Microsoft shares were unchanged. The new joint venture will be be home to the bookseller's digital and college businesses.
Barnes and Noble announced at the beginning of the year that it
was looking at splitting off its digital business. It said it does
not yet know whether it will float the new company.'Significant
expansion' The Nook e-reader was launched in 2009 to compete with
Amazon's Kindle, allowing users to buy, download and read digital
versions of books and magazines.
Its content will now be available to the growing number of people
with mobile devices running Microsoft software. "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 William Lynch, chief executive of Barnes &
Noble.
Microsoft's new Windows 8 operating system - due to launch this
autumn - is specifically designed to work with touch screens and
mobile devices like tablet computers. Its Metro user interface can
host small dedicated applications like Nook to sit on top of Windows.
"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," said Andy Lees, president
at Microsoft.
"We're on the cusp of a revolution in reading." Amazon's
Kindle service is already available as a Windows 8 app
