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Microsoft Pri0

Welcome to Microsoft Pri0: That's Microspeak for top priority, and that's the news and observations you'll find here from Seattle Times technology reporter Janet I. Tu.

May 8, 2013 at 6:58 PM

Report: Microsoft thinking of purchasing Nook Media digital assets

Microsoft is thinking of buying the digital assets of Nook Media, the partnership between Barnes & Noble and Microsoft focusing on digital reading and digital education, according to a report in TechCrunch.

Microsoft is offering to pay $1 billion, according to the TechCrunch report, which also says “Nook Media plans to discontinue its Android-based tablet business by the end of its 2014 fiscal year as it transitions to a model where Nook content is distributed through apps on ‘third-party partner’ devices.” TechCrunch attributed the information to internal documents that it obtained and said those documents were not clear on whether the third-party devices would be Microsoft’s or not.

But given that Microsoft has confirmed it is working with manufacturers to make smaller Windows-based touch devices — devices that would presumably be smaller, lighter and thus friendlier to e-reading — it would make sense for the company to want to acquire digital content for such devices.

Microsoft and Barnes & Noble announced their Nook Media partnership in April 2012. That partnership, which created the Barnes & Noble Nook Media subsidiary, involved an investment of $300 million from Microsoft. The partnership gave Microsoft a 17.6 percent equity stake in an area where it had been lacking presence: e-books, and was seen as a way for Microsoft to battle digital content giants Amazon and Apple.

Microsoft also committed $180 million over three years in revenue-sharing guarantees and said it would also contribute $125 million over five years to help the subsidiary expand into international markets. That deal was finalized in October 2012.

But since then, little has been heard about the partnership, other than a Nook app appearing on Windows 8 devices, with special offers for those who download it.

And Barnes & Noble recently turned to Microsoft arch-rival Google, signing a deal to install the Google Play app store, as well as Gmail, Chrome and Google Maps on new Nook tablets, according to Bloomberg News. Nook Media posted a loss of $191 million on sales of $2.18 billion in the three quarters through Jan. 26, according to Bloomberg.

A Barnes & Noble spokeswoman declined to comment. A Microsoft spokesperson could not immediately be reached for comment.

Comments | Topics: barnes & noble, nook, nook media


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