What Microsoft Got In The Nook Deal
By Dana Blankenhorn: Investors in Barnes & Noble (BKS) reacted far more positively to Microsoft's $300 million buy-in with Nook than did Microsoft (MSFT) shareholders.Perhaps rightly so. Microsoft values the Nook business at $1.7 billion. Put that next to the $268 billion Microsoft itself is worth and you have sofa cushion money. And please note that MSFT is not buying into BKS but a "new unit" dubbed Newco that will own the Nook business.But this deal could provide more than a lifeline to users of the Nook, who feared they might have gotten an orphan given the huge success of Amazon.Com with its Kindle line.It could also provide Microsoft two things it really needs going forward.
- A Digital Reader Platform
- A Channel
It's this last item that's the key. BKS dominates college book retailing. Most colleges turned their book stores over to BKS years ago, and they're important hang-outs. (Starbucks'Complete Story »