Microsoft, Barnes & Noble join hands to transform e-reading

Telecom Lead America: Barnes & Noble and
Microsoft have announced the formation of a strategic partnership in a new
Barnes & Noble subsidiary.

 

Newco, the newly formed subsidiary will bring together
the digital and College businesses of Barnes & Noble. Barnes & Noble
and Microsoft have settled their patent litigation, and moving forward, Barnes
& Noble and Newco will have a royalty-bearing license under Microsoft’s
patents for its NOOK eReader and Tablet products.

 

The partnership will accelerate the transition to
e-reading and bring content to the Windows platform and its users.

 

Microsoft will make a $300 million investment in Newco at
a post-money valuation of $1.7 billion in exchange for an approximately 17.6
percent equity stake.

 

Barnes & Noble will own approximately 82.4 percent of
the new subsidiary, which will have an ongoing relationship with the company’s
retail stores. Barnes & Noble has not yet decided on the name of Newco.

 

The formation of Newco and our relationship with
Microsoft are important parts of our strategy to capitalize 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,” said
William Lynch, CEO of Barnes & Noble.

 

The partnership will bring NOOK application for Windows
8, which will extend the reach of Barnes & Noble’s digital bookstore by
providing digital catalogues of e-Books, magazines and newspapers to Windows
customers.

 

Through the newly formed Newco, Barnes & Noble’s NOOK
Study software will provide students and educators the preeminent technology
platform for the distribution and management of digital education materials in
the market.

 

  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,” said Andy Lees, President at Microsoft.

 

Microsoft Q3 revenue up 6% at $17.41 billion

 

Microsoft posted 6 percent increase in revenue at $17.41
billion for Q3 2011-12, against the prior year period.

 

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