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.
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.