Book retailer Barnes & Noble, US, and software vendor Microsoft Corp., US, have announced a strategic partnership to form a new Barnes & Noble subsidiary, which will build upon the history of strong innovation in digital reading technologies from both companies. It is expected that the partnership will accelerate the transition to e-reading, which is seen to be revolutionising the way people consume, create, share and enjoy digital content.
The new subsidiary will bring together the digital and College businesses of Barnes & Noble. Microsoft will make a $300 million investment in the new subsidiary at a post-money valuation of $1.7 billion in exchange for an about 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 the new subsidiary.
One of the first benefits for customers will be a NOOK application for Windows 8, which 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 US and internationally.
Barnes & Noble and Microsoft have settled their patent litigation. Moving forward, Barnes & Noble and the new subsidiary will have a royalty-bearing license under Microsoft's patents for its NOOK eReader and Tablet products. This paves the way for both companies to collaborate and reach a broader set of customers.
