Microsoft and Barnes & Noble Team Up on E-Books

Barnes & Noble is getting a $300 million boost from Microsoft for its Nook business, which could help the two take on the Amazon and Apple behemoths. Microsoft's investment will buy them a 17.6-percent stake in the vaguely defined unit of Barnes & Noble's company that "will accelerate the transition to e-reading, which is revolutionizing the way people consume, create, share and enjoy digital content," according to a statement from the company. Also part of the deal, Barnes & Noble will get an app on the Windows 8 operating system.

This agreement may end a patent dispute between B&N and Microsoft, and it may open the door for the bookseller to spin off its Nook business into a separate entity. There's no word on whether this means Kindle will be left off the official Windows 8 OS release, but the Windows 8 public review of the OS did feature a Kindle app. It is also unknown as to whether Barnes & Noble will abandon the Android OS currently found on its Nook Tablet, Nook Color and Nook Simple Touch.

The announcement comes just weeks after announcing a new e-reader, the $139 Barnes & Noble Nook Simple Touch with GlowLight, and weeks after the U.S. Justice Department filed suit against Apple and publishers for e-book price fixing. 

In February, Barnes & Noble its digital business reported a loss, before interest, taxes, depreciation and amortization, of $93.7 million in its Q3, widening from a loss of $50.5 million a year earlier. The loss was attributed to aggressive holiday advertising costs.

Microsoft launched its own e-book software in 2000 called Microsoft Reader, but its library of content was never competitive. And it's been reported that the company will discontinue the service on August 30th.

Anna Attkisson
Managing Editor
A lover of lists and deadlines, Anna Attkisson heads up features and special projects for, in addition to covering social networking and accessories. She joined the LAPTOP staff in 2007, after working at Time Inc. Content Solutions where she created custom publications for companies from American Express to National Parks Foundation.