Microsoft’s Rumored Nook Buyout Could Make Amazon a Winner

Nook tablets: Doomed?

Microsoft is willing to pay $1 billion for digital assets owned by Nook Media LLC, according to a new report from TechCrunch. Such a move wouldn’t be totally surprising, considering that Microsoft already invested $300 million in the venture last year (earning it a 17.6 percent stake in the process), but it does open up questions about the future of Barnes & Noble’s Nook e-reader and e-book collection.

As it stands right now, Nook Media is a strategic partnership between Barnes & Noble and Microsoft. By paying out that cool billion (according to TechCrunch), Microsoft would acquire the rights to all those e-books and the associated software. In addition to carrying a variety of commercial titles, Nook Media also offers texts for colleges, which could dovetail neatly with any Microsoft education initiatives.

But what about the actual Nook tablets and e-readers? According to internal documents referenced by TechCrunch, Nook Media will terminate its Android-based tablet line by the end of its 2014 fiscal year, while the Nook e-readers will be allowed to decline in usage as people shift to full-color tablets. By 2014, the venture’s attention will shift to pushing Nook content onto third-party devices: “The documents we have are not clear on whether the third-party tablets would be Microsoft’s own Windows 8 devices, tablets made by others (including competing platforms) or both.”

If Microsoft does pay that $1 billion, it would be tripling down on an investment that hasn’t generated many new products or initiatives. Rumors persisted for quite some time that Microsoft would leverage Nook Media’s digital assets into some sort of Windows-based e-reader, but such a device never appeared. And if Microsoft intended to bundle all that Nook-related content into some sort of exclusive offering for Windows 8 devices, well, that never happened, either; like Amazon’s Kindle app, Nook software is present in pretty much the same form on a variety of different platforms.

If Nook Media does wind down the Nook as a portfolio of hardware devices, it means that Amazon Kindle has pretty much won the e-reader wars. In addition to the Kindle Fire and grayscale Kindle e-readers, Amazon offers Kindle software that can display e-books on third-party tablets and PCs. Should Barnes & Noble exit the hardware game entirely, there’s a chance that “Kindle” could become synonymous with e-readers in the same way that Thermos, for example, evolved into the catch-all term for a particular type of container.

That being said, if this deal is real and goes through, there’s also the chance that Microsoft could do something innovative that makes it a major and unexpected player in the e-reader space. Time will tell.

 

Image: Barnes & Noble

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