Microsoft has poured a lot of money into Nook Media, the publishing company that Barnes and Noble spun out in October, 2012—$300 million. Now Microsoft is rumored to be buying the entire company, for $1 billion.
Microsoft $MSFT has poured a lot of money into Nook Media, the publishing company that Barnes and Noble spun out in October, 2012—$300 million. Now Microsoft is rumored to be buying the entire company, for $1 billion.
In light of the decline in interest in e-book readers—and right now most people know Nook as the battered also-ran in that category, after Amazon $AMZN’s Kindle e-reader—this might seem ill-advised, for , the entire category is losing steam rapidly, and —i.e. tablets—as primary e-reading devices.
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Microsoft, wisely, doesn’t care much about the e-reader business. The same document obtained by TechCrunch revealing the possibility of an acquisition also suggests the Nook e-reader will be killed off by 2014. Rather, Microsoft wants all the content and publisher relationships that Nook has built up. In other words, Microsoft want to become a retailer of e-books, just like Amazon and Apple $AAPL.
It makes sense: Whether we’re talking about Apple (iBooks, iTunes, the App store), Amazon (Kindle reader, Amazon Prime, Amazon Appstore), Google $GOOGL (Google Play, which covers it all) or Microsoft, what it takes to play at the highest level of consumer electronics is having not only compelling hardware, but also a compelling marketplace for media and apps, a walled garden into which a company can enfold customers and never let them go. (Microsoft declined to comment for this piece.)
Coda: What does all this mean for Barnes and Noble? There’s a strong case to be made the company will go the way of the now-defunct book retailer Borders.
