What Microsoft’s Barnes & Noble Investment Means for Readers
Microsoft announced this week that it would be making a $300 million investment in a new Barnes & Noble subsidiary. If this partnership goes according to plan, it will change the way many of you read.
Recent developments in the e-reader market prove yet again that digital content is big business. The major players are lining up to compete for your dollars and downloads, but how will you benefit?
More Business for Them
In an effort to keep up with Amazon and Apple in the e-book and e-reader markets, Barnes & Noble has enlisted the help of technology giant Microsoft in forming a new subsidiary company that is currently known as Newco (the final name is yet to be determined). Newco will include all of B&N’s Nook businesses as well as its educational College business.
In exchange for the $300 million investment, B&N will fork over around 17.6 percent equity in Newco, which has been valued at $1.7 billion. This deal has the e-reader community wondering what is in store for the Nook and B&N’s digital products.
The partnership also creates an opportunity for B&N to spin off Newco into a standalone operation, or even to be acquired by Microsoft. A little late to the mobile market party, Microsoft has been looking for ways to gain a foothold in the mobile device space. Now it has the Nook platform at its fingertips.
And it looks like B&N has finally found the financial partner it has been looking for, too. B&N’s innovation in the e-book space just hasn’t been enough to keep up with cash-infused competitors. That $300 million should definitely help.
With B&N gaining the capital it needs to compete with Apple and Amazon–and Microsoft getting a readymade e-reader to compete with Apple and Amazon–you could say Newco was a strategic match made in Heaven.
More Content for Us
We, the readers stand to benefit from this deal as well. It presents the opportunity to get more content on the Microsoft platform. Not only will more e-books become available on Microsoft’s Windows 8 tablet, but new apps are also in the works that can deliver content directly to Microsoft’s current products. In fact, the first product out of the Newco gate will
be a Nook application for Windows 8.
It’s a start, but Microsoft has a lot of catching up to do. Kindle users already have seamless access to all of Amazon’s e-book offerings, and iPad users enjoy plenty of great content, too.
As Microsoft plays catch-up by trotting out a steady stream of innovations and offerings, readers will benefit from all the the newly generated content. Competition always gives consumers more choices, and in digital publishing, those choices increase exponentially.
Once writers were limited to the tiny trickle of opportunities to be had at the major publishing houses. Now, digital publishing has opened the floodgates for getting content out to the world, and readers are consuming it as quickly as it can be produced.
Of course, benefitting from all this new content means being open to a whole new e-reader, too. Most of us have already settled on a reader, and there’s a good chance it’s an iPad or the Kindle. The question, then, is would you consider giving the Nook another look, once it has had a Microsoft makeover?