This morning, Microsoft announced a new partnership with Barnes & Noble for their eReader business having settled the previous litigation on claimed patent infringement.
The new subsidiary of Barnes & Noble called Newco (not the real name, just a placeholder to be determined later) will focus on the digital and college business of the company. Microsoft is investing $300 million into the venture and will maintain a 17.6% equity stake in the new company.
Of course it should come as no surprise that a NOOK eReader will be one of the first priorities of the nw partnership with a client for Windows 8 in the works. Barnes & Noble commented on the newly announced deal noting:
“The formation of Newco and our relationship with Microsoft are important parts of our strategy to capitalize on the rapid growth of the NOOK business, and to solidify our position as a leader in the exploding market for digital content in the consumer and education segments,” said William Lynch, CEO of Barnes & Noble. “Microsoft’s investment in Newco, and our exciting collaboration to bring world-class digital reading technologies and content to the Windows platform and its hundreds of millions of users, will allow us to significantly expand the business.”
Although lots of pundits like to criticize Microsoft for "patent trolling" others would claim that the company is looking out for their shareholder's interest by defending what they see as their intellectual property. Despite this, some saw in B&N as standing up to Microsoft, fighting them publicly in the matter. Instead, B&N made a deal with the devil perhaps even angering Google along the way (Android powers the new Nook eReader).
Either way, Microsoft's strategy seems to be paying off for although B&N does not have to admit any guilt for the claimed violations, they clearly were forced to the table for what looks to be an exciting deal for both companies. In fact, this could be the lifeline the fading book retailer needs in its life and death struggle with adversary Amazon.com.
No mention of a Windows Phone client has been announced which has been missing since Windows Mobile and the HTC HD2. However, rumors suggest that Windows 8 and Windows Phone 8 are based on the same kernel and have large amounts of overlapping code. As a result the announcement of a Windows 8 client may in fact be a dual one for Windows Phone.
Regardless, you can imagine B&N will be getting some favorable treatment from Microsoft in the future. Something that Apple and Google will have trouble in matching. For this, we' very excited by this deal (even if we're Kindle fans here).
Full press release after the break...