In April, Microsoft and Barnes & Noble announced a partnership. B&N was spinning off its Nook division into NOOK Media LLC, and Microsoft was to have a hand in it. The move raised a few eyebrows as analysts and pundits speculated what the move was about. Today Barnes & Noble and Microsoft have completed the partnership. Though we still don't know much about what the two companies are up to, we do know that this is a serious investment from Microsoft: to the tune of $300 million for a 17.6 percent stake (Barnes & Noble retains the remaining shares).
Why?
What kind of music will Microsoft and Barnes & Noble make together? Before Surface was announced, some had speculated that Microsoft was partnering with B&N to produce its own Microsoft-branded Windows 8 tablet. As we saw soon after, though, Surface didn't have a trace of Nook in its blood.
The most likely scenario is that this is an educational initiative. Microsoft and Barnes & Noble both know the potential of digital reading in schools and colleges. Both companies share a fear that Apple and Amazon will dominate that segment with the iPad and Kindle. Perhaps Microsoft decided that Surface – and other Windows 8 tablets – wouldn't be cost-effective.
Enter Barnes & Noble, which already manufactures e-readers and budget tablets that would fit the bill perfectly. With B&N trailing Amazon in the e-reader and cheap tablet wars, it could, in turn, benefit from a having a powerful big brother like Microsoft.
What else could it be? Will the 2014 edition of the Nook HD run Windows 8? Maybe future Nooks will control the Xbox 720? These are shots in the dark; we'd place the safe money on this move being aimed squarely at education. Either way, it will be interesting to see the fruit bore from the union of these two wild card companies.
What do you think? Is this all about education, or could it be something else entirely? Let us know in the comments!
For more information, see the full press release.