News

Barnes & Noble and Microsoft To End Investment Deal

Barnes & Noble gave notice today that its deal with Microsoft will be coming to an end.

Both companies appear to want out. The details are spelled out in B&N's two 8-K Securities and Exchange Commission filings, which were posted today.

Back in 2012, the two companies struck a college books subsidiary investment deal in which Microsoft pledged to invest $300 million, while taking an estimated 17.6 stake in the new subsidiary, which was called "Newco." The deal also included a settlement of litigation between the two companies.

The litigation settlement concerned the use of the Linux-based Android operating system in B&N's Nook electronic reader devices. Microsoft and B&N had fought a rather bitter legal dispute over the Linux use. Microsoft claimed the Linux use violated some of its patents, while B&N claimed that Microsoft was just abusing the U.S. patent system to support its flagging Windows Mobile and Windows Phone market share. In the end, B&N paid some royalties to Microsoft, while Microsoft invested in B&N's Newco subsidiary.

As part of their collaboration efforts, the two companies collaborated on Nook for Windows 8. It's a reader app for Windows 8 devices. It doesn't appear that B&N ever made a Windows 8-based Nook device, though.

The termination of the deal with Microsoft is expected to take effect at "the end of August 2015." It will enable B&N to "continue its rationalization of the NOOK Digital business" while enhancing its "operational and strategic flexibility," according to B&N's 8-K filings.

B&N's second-quarter 2015 earnings statement indicated that sales of its Nook devices and accessories were down 63.7 percent compared with 2Q 2014 results due to lower volumes. B&N's fiscal second quarter ended on Nov. 1, 2014.

About the Author

Kurt Mackie is senior news producer for 1105 Media's Converge360 group.

Featured

  • Microsoft Endpoint Manager Improvements Highlighted at Ignite

    Improvements in the Microsoft Endpoint Manager (MEM) management solution were part of Tuesday's Microsoft Ignite online event.

  • Green City Illustration

    Microsoft Ignite 2020 Reaction, Part 1: A New Normal for Tech Conferences

    Something about Satya Nadella's opening keynote makes Brien wonder if Microsoft thinks we'd all be better off doing everything -- including conferences like Ignite -- remotely, even after the pandemic is over.

  • Microsoft Ignite: Azure Advances Across Five Frontiers

    To kick off the Microsoft Ignite virtual conference, CEO Satya Nadella made a bold claim about the public cloud with the second-largest market share behind Amazon.

  • Microsoft Buying Games Maker ZeniMax Media for $7.5 Billion

    Microsoft is buying ZeniMax Media, parent company of Bethesda Softworks and other game-maker affiliates, for $7.5 billion in cash.

comments powered by Disqus