If you’re reading a book these days, chances are that the book is in electronic format either on an e-reader or a tablet. The days of losing your place and paper-cuts aren’t that far from the rearview mirror. It’s needless to say that eBooks are big business. Everyone expected that Microsoft would eventually enter the eBook fray, but this was a real surprise.
Microsoft isn’t going create their format like Apple iBooks or Google Play Books, to compete with Amazon’s Kindle or the Kobo. Rather Microsoft has decided to invest $300 million and create a joint venture partnership with Barnes and Noble making the Nook their eBook of choice for Windows 8. This joint venture, currently called Newco, will be owned 82.4% by Barnes and Mobile with the remaining 17.6% Microsoft. This also ends any pending patent litigation between the two companies and offers both B&N and Newco royalty-free use of Microsoft patents.
In addition to the consumer Nook eBook business, Barnes and Noble’s collegiate arm would be included in Newco. This could potentially pave the way for a competitor to Apple’s iBooks textbooks. The one item of note was the lack of clarification on whether future versions of the Nook tablet which currently runs on a customized version of Android would be switching to Microsoft technology or staying with the current platform.