Microsoft Eyes Mobile E-Reading Market With $1B Nook Media Buy: Report
Microsoft is preparing to snap up Nook Media LLC for $1 billion, according a new report.
TechCrunch, claiming to have obtained internal documentation, reported May 9 that the software giant plans to acquire the digital assets of the joint venture between itself and Barnes & Noble. The companies established Nook Media in 2012, a deal that also brought to a close litigation related to Microsoft's Android-related patents.
On Oct. 4, 2012, Microsoft announced that it completed the formation of Nook Media, a business comprised of Barnes & Noble's Digital and College businesses. The software giant invested $300 million for a 17.6 percent stake in the joint venture, which was valued at $1.7 billion.
At the time, Microsoft president Andy Lees said that the deal would bring ebooks to devices powered by his company's soon-to-be-released Windows 8 operating system. "Nook Media is a leader in developing the next generation of digital reading and we look forward to the company bringing one of the world's largest digital libraries to Windows 8 devices via their upcoming Windows 8 app."
Now, Microsoft appears poised to take over the reins and venture deeper into the mobile ebook market.
"In this plan, Microsoft would redeem preferred units in Nook Media, which also includes a college book division, leaving it with the digital operation—ebooks, as well as Nook e-readers and tablets," wrote TechCrunch's Eric Eldon and Ingrid Lunden.
The documents also reveal that after fiscal year 2014, Nook Media is ending its Android-based line of tablets. Instead, the company will release content to "third-party partner" tablets via apps. Those tablets—it's unspecified whether they are Windows 8-based or if they include other platforms—are slated to appear in 2014.
The strategy echoes Amazon's approach to ebook sales. Although it offers its own, Amazon-branded dedicated e-readers and Android-based tablets that feature deep integration with the Kindle ecosystem, the company also makes available a Kindle app for Apple's iOS and Google's Android mobile operating systems. Like Nook, the company also released a Windows 8 app.
The move could spell the end of Barnes & Noble's 7-inch Nook HD and the 9-inch Nook HD+ tablets. Apart from the lack of cameras, the thin and lightweight devices emerged as competitive, media-consumption-focused alternatives to popular tablets like the Android-powered Nexus 7 and Apple's iPad. Late last week, on May 5, Barnes & Noble added support for Google Play, allowing owners of Nook HD tablets to access the marketplace's 700,000 apps and millions of songs.
Nook Media's e-paper based readers are safe for the time being, but their days are numbered. The device category's "gradual, natural decline" was referenced by the report.
When asked for a comment, a Microsoft spokesperson informed eWEEK that "we have nothing to share as Microsoft does not comment on rumors or speculation."