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Microsoft invests $300m in Nook ebook.

Microsoft likes the look of Barnes & Noble's Nook ebook

Posted: 1st May 2012

Microsoft has taken aim at Amazon and Apple with a multi-million dollar investment in Barnes & Noble's Nook reader and college textbook businesses.

The pair have formed a partnership that will see Microsoft make a $300m investment in a new subsidiary that will bring together the digital and College businesses of Barnes & Noble.

The deal values the as yet unnamed Newco at a post-money valuation of $1.7bn in exchange for an approximately 17.6% equity stake. Barnes & Noble will own approximately 82.4% of the new subsidiary, which will have an ongoing relationship with the company's retail stores.

Microsoft and Barnes & Noble hope the partnership will accelerate the transition to e-reading, which is revolutionising the way people consume, create, share and enjoy digital content.

Commenting on the deal, William Lynch, CEO of Barnes & Noble said: "The formation of Newco and our relationship with Microsoft are important parts of our strategy to capitalise on the rapid growth of the Nook business, and to solidify our position as a leader in the exploding market for digital content in the consumer and education segments.

"Microsoft's investment in Newco, 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."

Andy Lees, president at Microsoft, added: “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.

"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.

"We're on the cusp of a revolution in reading."