According to a press release today, Microsoft and Barnes and Noble are forming a strategic partnership to create “world-class digital reading experiences for consumers.” This joint effort, called Newco, will be a new subsidiary of Barnes and Noble and build upon the platform already at Barnes & Noble.
For Microsoft’s part, they will contribute $300 million dollars for a 17.6% equity stake in this new venture. Andy Lees, President at Microsoft believes, the two companies’ “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 will maintain 82.4% of the new partnership with a continued connection to their retail stores. William Lynch, CEO of Barnes & Noble shared, “The formation of Newco and our relationship with Microsoft are important parts of our strategy to capitalize on the rapid growth of the NOOK business, and to solidify our position as a leader in the exploding market for digital content in the consumer and education segments.”
Some good things could come out of this for consumers. The first impact is a greater digital reading experience. With the majority computer users still on a Windows device, the upcoming integration of a Nook reader with Windows 8, would assist in a quicker expansion the Nook sales. Amazon already has a Kindle reader available for Windows, but competition is good for those of us who wish to have more stores at which to shop. Though Windows RT ( Windows 8 ) tablets will also be coming out later this year, most of those devices may be heavier than the Nook eReaders and not as comfortable as reading on a paperback-sized device.
The second impact could arise from the physical presence of Nook devices in a particular store. While Amazon has distribution and sales partnerships for their devices, Barnes & Noble has actual store where people can go to relax, read, and find new material. They also have other people who can recommend titles they have enjoyed in the digital format. As we move further and further into the digital world, it is always nice to get advice from a person rather than a rating system.
One last item that is part of this new relationship is that Barnes & Noble and Microsoft have essentially settled their patent litigation. According to the press release, “Barnes & Noble and Newco will have a royalty-bearing license under Microsoft’s patents for its NOOK eReader and Tablet products.”
Hopefully, this will grow the innovation for digital content and digital devices.