Menu
Microsoft closes the book on its Nook partnership with Barnes & Noble

Microsoft closes the book on its Nook partnership with Barnes & Noble

The deal, struck in 2012 with high expectations, has fizzled out

A Nook deal Microsoft and Barnes & Noble struck with much fanfare less than three years ago has deflated, after failing to achieve its lofty goals in the e-reader market.

After plunking down $300 million for an almost 18 percent stake in Nook Media in April 2012, at a stratospheric valuation of $1.7 billion, Microsoft has agreed to sell back its share to Barnes & Noble, which continues with its plan to spin off the money-losing business as an independent public company.

As part of the termination agreement announced Thursday, Microsoft will receive $62.4 million in cash and 2.73 million shares of Barnes & Noble common stock, plus payments of undetermined amounts for several years contingent on Nook Media sales.

When the companies struck the partnership, they said it would "accelerate the transition to e-reading" and have a strong focus on Barnes & Noble's sales to colleges. Initial plans back then called for a Nook application for Windows 8, which the companies said would extend Barnes & Noble's reach to "hundreds of millions of Windows customers."

However, those high-flying aspirations to revolutionize and take over the digital reading market never materialized, as the Nook business struggled to gain traction and compete against Amazon's Kindle tablets and e-readers. Barnes & Noble instead struck a deal in June of this year with Samsung for a co-branded Nook device running Android.

In the quarter ended Nov. 1, the Nook business, including digital content, devices and accessories, generated $64 million in revenue, a drop of 41.3 percent year on year. Sales of devices and accessories in particular fell almost 64 percent, while digital content sales were down 21 percent.

Barnes & Noble, which made the announcement as part of its second quarter earnings report, expects to complete the separation of its retail and Nook Media businesses by the end of August of 2015.

Juan Carlos Perez covers enterprise communication/collaboration suites, operating systems, browsers and general technology breaking news for The IDG News Service. Follow Juan on Twitter at @JuanCPerezIDG.

Follow Us

Join the New Zealand Reseller News newsletter!

Error: Please check your email address.

Tags business issuesMicrosoftSEC Filingsinternetrestructuring

Slideshows

Top 50 defining moments of the New Zealand channel in 2016

Top 50 defining moments of the New Zealand channel in 2016

Reseller News looks back on a tumultuous 12 months for the New Zealand channel, assessing the fallout from a year of sizeable industry change. Whether it be local or global mergers and acquisitions, distribution deals or job changes, the channel that started the year differs somewhat to the one set to finish it - Reseller News assesses the key moments that made 2016.​

Top 50 defining moments of the New Zealand channel in 2016
​Hewlett Packard Enterprise honours high achieving NZ channel

​Hewlett Packard Enterprise honours high achieving NZ channel

Hewlett Packard Enterprise honoured its top performing Kiwi partners at the second running of its HPE Partner Awards in New Zealand, held at a glitzy ceremony in Auckland. Recognising excellence across eight categories - from distributors to resellers - the tech giant celebrated its first year as a standalone company, following its official split from HP in 2015.

​Hewlett Packard Enterprise honours high achieving NZ channel
Nutanix treats channel partners to Christmas cruise

Nutanix treats channel partners to Christmas cruise

Nutanix recently took to the seas for a Christmas Cruise around Sydney Harbour with its Australia and New Zealand staff, customers and partners to celebrate a stellar year for the vendor. With the sun out, they were all smiles and mingled over drinks and food.

Nutanix treats channel partners to Christmas cruise
Show Comments