Microsoft announced today that it would spend $300 million to buy a stake in a new subsidiary of bookseller Barnes & Noble, which would include its digital (e-book) and college businesses. Microsoft said its goal was to create "the preeminent technology platform" for digital textbooks, placing it squarely against Apple's new iBooks initiative and textbook publisher partnerships.
The new subsidiary will create a Nook app for Windows 8, which will be compatible with Barnes & Noble's digital textbooks and will apparently be based on the existing Nook Study app. And the Microsoft patent lawsuit, where it was suing Barnes & Noble for parts of its Nook Color interface? That's settled now; there's no more danger of the Nook getting sued out of existence. With Microsoft gearing up to push its own iPad-style tablets into the market, however, a Microsoft/Barnes & Noble partnership might view the old Nook -- which is powered by Google's open-source Android operating system -- as redundant.
Microsoft's tablet challenge
So far, Microsoft has been slow to adapt to the change in the "computer" industry caused by Apple's iPad. Before the iPad, it sold Windows licenses for a version designed to run on bulky "tablets," which were laptops with a folding screen and a stylus. But with the $499 iPad eating into sales of Windows laptops, Microsoft is banking on its upcoming Windows 8 operating system -- designed to make tablets work much like the iPad -- to turn the tide.
Barnes & Noble, however, was already there, with its extremely low-cost Nook tablets. Besides buying books from the company's e-book store, they're able to browse the web and use games and apps, albeit a much more limited selection than Apple's (or Microsoft's).
Different market segments
On the other hand, because the Nook is so small and cheap it may belong to a completely different market segment than the upcoming Windows 8 tablets. Digitimes has reported a rumor that there would be Nook-sized (and -priced) Windows tablets, but PC World's Jared Newman feels that they "Don't Make Much Sense," partly because their screen resolutions place them under Microsoft's minimum requirements.
Besides that, the Nook Study software that Microsoft focused on in the press release doesn't even run on the Nook tablets themselves; it's only for Windows PCs and Macs.
Executives "would not comment" on the possibility of Nook-branded Windows tablets, according to Reuters' Phil Wahba and Bill Rigby. Thanks to the patent settlement, though, Barnes & Noble will be paying Microsoft royalties for each Nook sold either way, just like HTC and several other Android device makers.
Jared Spurbeck is an open-source software enthusiast, who uses an Android phone and an Ubuntu laptop PC. He has been writing about technology and electronics since 2008.