May 20th, 2013
Microsoft has gotten next to nothing from its $300 million investment in Barnes & Noble, analysts said, but it may reap some rewards as it prepares to ship smaller tablets.
In April 2012, Microsoft and the bookseller announced a new, co-owned subsidiary that included Barnes & Noble’s Nook business. That bought Microsoft a 17.6% stake in the company. Other parts of the deal settled patent disputes between the two, promised Nook royalties to Microsoft and yielded a Nook app for Microsoft’s “Modern” tiled user interface.
A year later, Microsoft has “gotten nothing up to now,” said Carolina Milanesi, a Gartner analyst.
But observers say the deal could still pay off in the form of a new generation of smaller, less expensive Windows tablets that would be better suited to e-reading than current larger models are.
A 7-in. or 8-in. tablet “is a great form factor” for e-reading, Milanesi said. Other analysts agreed that the Nook Media collaboration could pay dividends if Microsoft or one of its partners introduces such a device.
“This was more an investment in an organization,” said IDC analyst Bob O’Donnell. “How that continues to play out we’ll just have to see.”