Barnes & Noble has teamed up with Microsoft to create a powerful competitor to the Amazon Kindle -- setting up a mano a mano battle for dominance of the e-reader market. The deal is built around the Barnes & Noble Nook and related digital business.
Microsoft annonced a $300 million investment in a new Barnes & Noble subsidiary, which could be spun off as a separate public company. Microsoft will hold a 17.6% equity stake in the subsidiary, giving it a valuation of $1.7 billion.
William Lynch, CEO of Barnes & Noble, said in a statement, “Microsoft’s investment in [the subsidary], 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.”
“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,” said Microsoft President Andy Lees. “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 at the cusp of a revolution in reading.”
Barnes & Noble had announced in January that it might split off its digital business to boost the company's value. Today, the company said is it exploring a public offering for the new subsidiary, which include its digital and college businesses, but provided no timetable for the decision.Copyright © 2014, The Baltimore Sun