Microsoft Could Buy Nook Media E-Book Company for $1 Billion

Microsoft May Buyout B&N’s Stake in Nook Media LLC

by Anton Shilov
05/08/2013 | 11:41 PM

Microsoft Corp. could buy stake owned by Barnes & Noble and other investors in their joint-venture Nook Media LLC and therefore obtain the electronic book business. After such a buyout, Nook Media is projected to discontinue its hardware tablets and eventually e-book readers. As a result, Nook Media content will be available only through special apps.

 

Nook Media comprises the digital and college businesses of Barnes & Noble will continue to has a very close and mutually beneficial relationship with Barnes & Noble’s retail stores. Microsoft made its $300 million investment in Nook Media at a post-money valuation of $1.7 billion in exchange for an approximately 17.6% equity stake, with Barnes & Noble owning the remaining shares. At present, Nook Media sells e-books via client software for Apple iOS, Google Android, Microsoft Windows platforms as well as via dedicated readers.

Microsoft is offering to pay $1 billion to buy the remaining stake in Nook Media LLC from Barnes & Noble and other investors, according to internal documents obtained by TechCrunch. The papers also disclose that Nook Media plans to terminate its Google Android-based tablet business by the end of its 2014 fiscal year as it transitions to a model where Nook content is distributed through apps on “third-party partner” devices. At the same time, Nook e-book readers are projected to die themselves.

Microsoft is clearly interested in making B&N’s digital content exclusive to its own software and hardware platforms. However, it does not seem that Microsoft has such plans in general as this would dramatically lower the value of Nook Media LLC and make it a much less competitive platform when compared to Apple iBooks, Amazon Kindle and other.

Microsoft and Barnes & Noble did not comment on the news-story.