Surprise, Surprise...not sure if many saw this coming. Now you may or may not know that several months after Barnes & Noble's last earnings call the B&N executives floated the idea out to analysts of splitting off the Nook part of the business into it's own company. This way the figured...it could be valued as a technology company which would use a higher multiple than the value it was getting as a part of the bricks and mortar Barnes & Noble company as a whole. Some saw this also as perhaps the first crack in the Nook fortress...with Amazon's Kindle Fire a major hit, many were afraid it was just a matter of time before the big BN succombed to the competition of the mighty Amazon similar to how their rival Borders books did.
However, not so fast. With this new investment by Microsoft, a cool 300 million, the Nook parts of the company which include the hardware of the Nook Color, the Nook Tablet, the app store as well as an education component are valued for $1.7 billion. While it's unclear at the moment what Microsoft has in mind the guess is that they will for one thing have a Nook App ready for the Windows 8 platform. There's also some suggestion that a new name might be coming for the MS/BN entity. As it stands now Barnes & Noble will retain 82.% of the company ownership with Microsoft taking the remaining 17.6%.
Is there the possibility of a Microsoft branded ebook reader? Could we see further iterations of the Nook Tablet and Nook Color built around the Windows 8 operating system instead of Android? Our bet is the latter which might be of some value to Microsoft in getting the number of tablets out there in the world a steroid boost to entice app developers. For those that thought Apple and the iPad had this tablet thing all wrapped up we dare to say we're still in the early innings of the game and Microsoft might still be a player yet if they continue to make slick moves like this.
Finally, in addition to the benefits of the business partnership, this investment puts to rest a bevy of lawsuits the company were engaged in regarding certain technology licensing rights. You can read more about the MS investment in Nook as well as the full press release at the link below.TechCrunch