Microsoft made a key investment in Barnes and Noble in 2012, and the partnership between the two companies was to build an electronic book storefront and get the Nook going further. Two years later, that investment that investment was bought back and is now a thing of the past.
The strategic partnership according to the documents was to help Microsoft take a stake in the digital Nook business. As the Nook has gone in during the past few years, Microsoft and its ebook strategy is still unsure, while Barnes and Nobles still sells the Nook, but in declining amounts.
Why Did MSFT Invest In B&N?
In 2012, many wondered why Microsoft would invest $300 million in Barnes and Noble, and in the digital Nook business. Microsoft didn’t have an ebook plan, and saw Barnes and Noble as the perfect partnership for their software business. The partnership never really took off, as neither company took off either.
The buyback as described on Thursday, was for Barnes & Noble to buy back for $62 million and 2.7 million Barnes and Noble shares of stock. It’s a big loss, and no one is clear on why Microsoft sold its stake. Neither company went beyond a Nook Windows 8 reading app, and a reading machine for Microsoft never happened.
What Is With Ebooks and Microsoft?
The bigger question on this whole transaction is the future strategy of Microsoft and its ebook future. Clearly, the Barnes and Noble move was a bad one, and they company never really took off with Microsoft’s ideas. It was an injection of cash for the bookseller, and was a bad idea when thought about two years later.
Microsoft has a reader app on various formats, and goes against Sony, Barnes and Noble, and Amazon in the ebook world. Microsoft has third party ebook readers on Windows, but never really had an ebook machine or hardware. It has the Surface Pro 3 which reads ebooks nicely, but never a handheld model like the Kindle.
It’s over between B&N and Microsoft. It looks like a bad investment that they got out of today.