Microsoft will take a 17.6 percent stake in B&N’s Nook ebook business and the retailer will create a Nook application for Windows 8 computers and tablets. ZDNet’s Mary-Jo Foley points out there was no mention of a Windows 8 phone app in the companies’ announcement.
The two companies are teaming up to create Newco, a subsidiary encompassing B&N’s digital and college businesses. Microsoft is pitching in $300 million, though Foley also reports that no Microsoft employees will go to the new venture until it comes up with a new name.
The partnership grew out of litigation in which B&N refrained from paying Microsoft for unnamed patents allegedly infringed on by Android. As Apple Insider points out, this settlement puts Microsoft smack in the middle of not only the e-reader craze, but also the digital textbook market that Apple wants to reinvent. B&N does have to pay royalties to Microsoft on every Nook sold.
Foley said she wouldn’t be surprised to see a Windows 8-based Nook device being developed soon.