October 4, 2012
NOOK Media Emerges From Partnership With Microsoft And Barnes & Noble
Enid Burns for redOrbit.com — Your Universe Online
The previously announced subsidiary started by Microsoft and Barnes & Noble finally has a name and a business model. This week, the two companies announced NOOK Media, a subsidiary that includes Barnes & Noble's NOOK Digital and College Business as well as Microsoft Investment to Advance Digital Reading Experience.
A preliminary announcement on the partnership was made in April, when Microsoft made an investment of $300 million in the enterprise. At the time, NOOK and Barnes & Noble's textbook business were valued at a combined $1.7 billion. Microsoft gained an approximately 17.6% equity stake, with Barnes & Noble owning the remaining shares.
"Microsoft and Barnes & Noble's strategic partnership in NOOK Media LLC will enable the companies to advance world-class digital reading experiences to the hundreds of millions of customers they jointly serve," a Barnes & Noble company statement said.
The timing for the partnership is twofold. Microsoft launches Windows 8 and Windows Phone 8 later this month. Both platforms will be hungry for content and applications. Barnes & Noble is looking to strengthen its NOOK platform of tablets and eReaders. The partnership will likely grow NOOK's user base as Windows 8 and Windows Phone 8 adoption grows.
Barnes & Noble is releasing two new NOOK tablets - NOOK HD and NOOK HD+ - in time for the holiday season. In the same timeframe, Barnes & Noble is also revamping its content offerings, likely to become part of NOOK Media, which include more digital books, movies and television shows available through the NOOK apps.
"As demand for digital content continues to increase, we are focused on bringing ground-breaking reading and learning content and technologies to more people in more formats than ever before, including the imminent launch of our exceptional NOOK reading application for Windows 8," said William Lynch, CEO of Barnes & Noble.
The companies have not said the exact roles each will play in the new subsidiary, only that both companies are contributing business interests. NOOK Media LLC includes the Digital and College businesses of Barnes & Noble. Barnes & Noble said it will continue to have a very close and mutually beneficial relationship with the bookseller's retail stores.
"We look forward to working closely with our new partner Microsoft to add value to their innovative new platform by bringing great reading experiences and one of the world's preeminent digital bookstores to millions of Windows 8 users," Lynch said.
Microsoft will gain a content property to offer for its Windows 8 users. "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," said Andy Lees, president at Microsoft. "We are also excited by NOOK Media's product roadmap and expansion into markets around the world as demonstrated by their recent launches in the United Kingdom."