It was announced Monday that Microsoft will take a $300 million stake in Barnes & Noble’s digital e-book business, possibly paving the way for a new spin-off company.
The new partnership will create a subsidiary that will include not only the Nook business, but also Barnes & Noble’s college textbook business as well. The deal also means Barnes & Noble will create a Nook application for Windows 8, much like the company’s existing e-book offering for Apple’s iPhone and iPad.
The companies revealed that they are exploring the possibility of spinning off the e-book and college businesses, which could result in either a stock offering, or outright sale.
This will place Microsoft solidly in the midst of the e-book battle where Barnes & Noble has been competing with Apple’s iBookStore and the Amazon Kindle. Apple increased it’s momentum for digital textbooks this year, with the release of iBooks 2 for iOS.
Barnes & Noble also offers an education focused line of content with its own Nook Study software. That, along with its college booksellers business, will fall under the new subsidiary, where Microsoft will have its $300 million stake.
“Our 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,” said Andy Lees, president at Microsoft. “We’re on the cusp of a revolution in reading.”
While Barnes & Noble still operates a chain of brick and mortar stores that sell physical copies of books, it has attempted to shift its business to the digital realm. It sells the Nook e-reader hardware, and offers e-books on multiple devices via its e-reader software. The company lags behind Amazon and its Kindle platform, which also offers Kindle reader hardware, as well as software on multiple platforms.