Microsoft has announced its plan to invest in Barnes & Noble’s Nook eReader. The fight in digital reading industry will have a new dimension with the Redmond software giant’s plan to pump $300 million to Nook to get a 17.6 percent stake. Of course, Microsoft will have plans to spin off the Nook with its operating system, possibly Windows 8 or its future versions. Indeed, the deal between Microsoft and B&N is a great step when observed from the side of customers, who will possibly get Windows-based eReaders along with the devices from Apple and Amazon.
Microsoft’s Nook deal comes when tech majors like Apple and others were trying to end Amazon’s dominance in eReading market with its Kindle eReader series. No doubt, Microsoft with B&N can contribute much into the ongoing battle in eReading market. As of now, Amazon owns a whopping 90 percent of the eBook market thanks to a huge variety of products from the company. In fact, the new alliance brings together two tech companies who have recently lost ground. For Microsoft, after iPhone and Google Android, the mobile market is a bitter thing. For B&N, one of America’s largest bookstore chains, its Nook eReader only has 25 percent of presence in the market behind Amazon ruthless domination.
Windows 8 and Nook
Microsoft has radically re-imagined its next generation PC operating system, the Windows 8. Set to be released late this year, Windows 8 will run on ARM based tablets and hybrid devices. Windows 8 has several amazing advanced features in web browsing, book reading movie watching and others. According to James McQuivey, an analyst at Forrester Research, there is a better chance that Barnes and Noble will produce a line of Nook devices based on Windows 8, which will possibly be the major aim of the deal.
Of course, B&N and its Nook will open a door for Microsoft to enter into the eBook reading industry. The enticing digital reading market will get a boost with Microsoft’s arrival. The competition will move to a new level, which is now mainly spearheaded by Amazon and Apple. According to the IDC analyst Bob O’Donnell, the deal would guarantees the long-term viability of the Nook.
Meanwhile, Goldman Sachs’ analyst Matthew Fassler, who called the deal game changer, says with the deal, B&N can earn an ability to fight Amazon and other challengers. “Our biggest concern for BKS has been its ability to compete against Apple and Amazon, two of the deepest-pocketed players in the technology and media world. NewCo now has an equally deep-pocketed partner.”
More provisions of the deal
As per the norms of the Nook deal, Microsoft will invest $300 million in the initial stage. The company is also committed to inject another $305 million to the bookstore firm over next several years. However, the deal is not exclusive to Microsoft. That means Barnes & Noble can go ahead with its tie-up with Google and other firms. Anyway, the core of the deal is to help B&N financially to avail its products across the world. It will eventually help the Redmond software giant put up its operating system and applications in the devices.
As part of the deal, B&N will list its Book application for Windows 8 on the new Windows app store, the press release says. It will avail the digital bookstore’s app to thousands of Windows 8 users. Well, it will “extend the reach of Barnes & Noble’s digital bookstore by providing one of the world’s largest digital catalogues of e-Books, magazines and newspapers to hundreds of millions of Windows customers in the U.S. and internationally,” notes the press release.
Patent suits settled
Thanks to the deal, all patent suits between Microsoft and Barnes & Nobles are settled. The companies have ended disputes over an array of technology patents between them.
It is Microsoft’s second remarkable deal since 2011 with a company that has been shrinking in market. Early last year, Microsoft signed up with the Finnish mobile maker Nokia to build hardware for its Windows Phone and Windows 8. The new Nook deal exposes the company’s plan to make presence in digital reading industry as well.