Microsoft’s Nook deal is a real ‘game-changer’


Barnes & Noble at The Shops at Tanforan mall i...

The idea of going into a bookstore and walking out with a tablet or other device might sound contradictory, but it could be the future for Barnes & Noble (BKS).

The bookseller announced this morning a plan to spin off its digital and college divisions into a subsidiary and partner with Microsoft  (MSFT) in a digital reading venture the two companies have dubbed Newco. The Windows creator will invest $300 million in return for a 17.6 percent equity stake in the new business. Goldman Sachs analyst Matthew Fassler called the deal a “game-changer.”

Barnes & Noble shares surged about 60 percent Monday on news. Microsoft shares were flat.

“To me, the key takeaway is this guarantees the long-term viability of the Nook,” said Bob O’Donnell, an analyst at IDC.

From a technology angle, it makes sense: Microsoft and Barnes & Noble need each other to better compete in the e-reader and tablet business. Fassler wrote, “Our biggest concern for BKS has been its ability to compete against AAPL (Apple) and AMZN (Amazon), two of the deepest-pocketed players in the technology and media world. NewCo now has an equally deep-pocketed partner.”

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About smartspending5

I am business-minded college student who has a heart for helping others attain emotional independence and psychological stability. My background lies in Broadcasting, network marketing, and Human Services. I believe that crises and extreme stress is necessary for one to grow and figure out what matters in life (Tony Robbins). This keeps me going when frustrations arise in my business. View all posts by smartspending5

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