BusinessMicrosoft and Barnes & Noble come together for “Newco”

May 1, 2012by Reva McPollom

Microsoft has decided to invest $300 million into Barnes & Noble, makers of the Nook, tablet to create a new subsidiary. While the details are being worked out, the so-called “Newco” (a placeholder until they think of a name) sounds like a spinoff of Barnes & Noble’s Nook digital media business, which includes e-books, textbooks, and all those digital newspapers and magazines its been selling on Nook devices.

Some people suggest this is Microsoft and B&N’s way of going toe-to-toe with Amazon and Apple. Others say that it’s just par for the course for Microsoft, a company that has a history of forcing former foes into partners through drawn out litigation. This comment stood out while reading through the original article on CNET:

BN was steered into this thanks to Microsofts patent lawsuit to which they lost on a ruling. This is not some new move to take things over. This is Barnes and Noble backed into a corner and forced to play ball with Microsoft due to patent infringement. All devices will run Windows 8 and everyone ignorant on the lawsuit will act like this is a new power group. This is not the case.

Whether or not Newco will be able to compete with Amazon, which currently holds about 60% of the e-book market, remains to be seen. But competition is the best case scenario, along with more diversity of choice for consumers.

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