Microsoft Return to eBooks Via Nook

The breaking news that Microsoft have bought heavily into Barnes and Noble to create a new venture which encompasses their Nook, digital and college business is shall we say a surprise and a significant move for both parties. Microsoft will invest some $300 million for a 17.6% stake in the new venture which will be valued at some $1.7 billion.

Obviously, the dust has to settle and much has to be revealed, but it has obvious to many that B&N needed a partner with clout and deep pockets and Microsoft certainly can bring that to the table, but they also needed a global partner and Microsoft ticks that box too. Microsoft also needed to get back into the mobile marketplace but had previously walked away from ebooks at  that famous BEA in 2008 when they literally dropped Windows BookSearch.

So B&N divides, its business gets some cash, raises its valuation and gets a big brother with only a minority stake today and potential for more investment in the future. That is certainly good business for B&N and one which must seem like Christmas to their investors.

The questions are now about speed, focus and how Microsoft’s interests are projected onto an Android platform. We still have to see how the international offer develops and the sixty four dollar question remains over Microsoft’s sticking power and whether if the going got tough they would simply walk away again.