Microsoft just guaranteed that there will be at least three major ereaders for the forseeable future. Today they announced a $300 million investment into a new subsidiary of Barnes & Noble that will include the Nook business and the college business of B&N.
This was a deal that both companies needed to do. Barnes & Noble was looking to spin off or sell the Nook business because they felt it needed heavy investment to succeed. Microsoft desperately needed a success for their mobile operating system as they are extremely late to the smartphone and tablet game.
The deal almost guarantees that we will be seeing a Nook Tablet running Microsoft Windows 8 instead of Google Android in the near future. The Nook Tablet is one of only two tablets (the other being the Kindle Fire) that has had any success going up against Apple’s iPad.
Microsoft will be able to include all the Nook Tablet sales in their sales statistics if they can replace Android with Windows 8 on the Nook Tablet. This will allow them to boast that Windows 8 is a success on tablets.
It’s interesting that the college business of Barnes & Noble is going to be included in the Nook subsidiary. This is probably a response to Apple’s digital textbooks for iPad. This will allow the Nook Tablet to continue to go toe-to-toe against the iPad in etextbooks.
The partnership will also allow all the ebooks that are currently available for the Nook to be available on any other Windows 8 tablet. Microsoft will be able to launch its Windows 8 tablets with an ebook offering that is comparable to Amazon and Apple’s offerings. This is a huge win for Microsoft.
A side effect of the deal is that it will probably mean that the Barnes & Noble physical stores will follow in the footsteps of Borders a bit faster. B&N stores struggled last year even with fewer physical competitors. Spinning off Nook removes the only bright spot of growth that B&N had to offer. The remaining B&N business will look very similar to what Borders looked like right before they went out of business.
It will take time to see if the Microsoft investment in Nook ends up being a success. What is clear for libraries is that library patrons will continue to ask for ebooks for at least three different ereaders for the forseeable future.