Barnes & Noble Spins Off Nook Business, Microsoft Snaps Up A Chunk Of It

Brad Chacos

Print media hasn't fared super well in the face of digital distribution. Turns out, a lot of people prefer live pixels to dead trees. So what's a company like Barnes & Noble -- with serious cash invested in both brick-and-mortar stores and the digital Nook ecosystem -- supposed to do in this new era of reading? The answer, apparently, lies in spinning off the Nook into an entirely new subsidiary company -- and giving Microsoft a 17.6 percent stake in the fresh venture. B&N did just that this morning.

Microsoft's stake cost the company a cool $300 million, but gives it a foothold in a booming e-reader market that Microsoft has been largely locked out of up until this point. In fact, one of the first concrete payoffs will be in the form of a Nook app for the upcoming Windows 8 O.S. And on Barnes & Noble's end, the Nook won't die even if physical stores do. (Admittedly, that's a long way off -- we're just sayin'.)

The new company doesn't have a name yet -- in fact, it's called "Newco" throughout the B&N press release -- but it will continue to have a major presence in the brick-and-mortar stores. Newco will also work hard to expand the Nook Study line and bring more educational materials and textbooks to market.

“The shift to digital is putting the world’s libraries and newsstands in the palm of every person’s hand, and is the beginning of a journey that will impact how people read, interact with, and enjoy new forms of content,” Microsoft's Andy Lees said in the press release.

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