Microsoft seeks purchase of Nook Media LLC: report

Microsoft seeks purchase of Nook Media LLC: report

Summary: According to reports, Microsoft is attempting to purchase the Nook ebook ecosystem for $1 billion.


Microsoft wishes to purchase the digital assets of joint venture Nook Media LLC for $1 billion.

According to documents obtained by TechCrunch, $1 billion is on the table which would allow the Redmond giant to buy preferred assets owned by the e-book joint venture between the firm and Barnes & Noble. Under the terms of the deal, Microsoft would take over the digital side of the business, including a college book section, Nook e-readers and tablets.

However, according to the documents, the Android tablet side of the business is soon to be dead in the water. By 2014, Nook Media will be discontinuing Nook tablets, and instead the joint venture will be shifting towards a business model that distributes Nook content through "third-party partner" devices. It is not clear what these devices will be -- whether third-party devices are tablets produced by Microsoft, rival firms or both -- but they are due to be introduced in 2014.

Nook e-readers will not immediately be discontinued. Instead, following the all-purpose device trend, the product line is expected to succumb to a natural, gradual death.

Barnes & Noble admitted earlier this year that profit generated from the 2012 holiday season was down 26 percent from the previous year, although denied exiting the hardware business at the time. In addition, although hardware sales were disappointing, content sales grew by seven percent. According to TechCrunch, the bookseller values itself at $1.66 billion -- and even though Microsoft's reported offer of $1 billion for the joint venture is high, compared to its value at the beginning ($1.7 billion), the dip is obvious.

Microsoft secured a 16.8 percent stake in Nook Media for a $300 million investment last year. If the Redmond giant takes over the content ecosystem, then potentially the company would secure a stronger position in the fight against content providers Amazon and Apple.

To date, over 10 million Nook e-readers and tablets have been sold. The Nook reader app is available on every major OS platform.

Topics: Microsoft, Mobility, Tablets

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    Masood Hasny
  • Smart move

    This would be a smart move for Microsoft (and one I've been predicting ever since word of Microsoft's $300 million cash injection became public last year). Buying B&N's digital assets gives Microsoft access to a large swath of content licensing deals as well as an instantly recognizable and well respected eBook store. It also guarantees that Windows 8 won't be left out in the lurch the way RIM was when Barnes & Noble discontinued its Blackberry app.

    As for Barnes & Noble, on the other hand, it's hard to see a viable future for what's left of the company. Brick and Mortar bookstores are succumbing to the eBook paradigm. What I'm seeing is the company trying to turn its stores into "learning toys" stores with cafes. The Nook reader was their Hail Mary pass, and while it gained some traction early on, it's been a money loser of late.

    At any rate, if this acquisition does go through, I expect we'll see a pair of 7" tablets from Microsoft. 1) an e-reader oriented Nook Surface and 2) an entertainment centered Xbox Surface. I also suspect that 7" will be the future of Win RT.
  • No more Nook tablets? :(

    I guess the addition of Google Play was a wasted endeavor...
    Anthony Tarantino
  • This makes no sense for anybody

    Nook benefits B&N more than it could possibly benefit MS, and I can see such a deal bringing some unwanted antitrust scrutiny. I see no upside to this deal. MS should instead invest the billion on R&D.
    John L. Ries