Microsoft has been working hard to add to their empire in ways that keep them firmly at the forefront of their industry. Their purchase of Skype last year was a bold movie towards domination of the video conferencing and internet communications markets, and Microsoft phones and tables continue to pose heavy competition for the other big boys. In another bold move, Microsoft had declared it has the eBook market firmly in its sites. With Apple and Amazon currently dominating this swiftly growing revenue stream, Microsoft put their money to work by investing $300 million into a new initiative and partnership with American book seller Barnes & Noble.
They are calling this venture Newco, and its aim is to marry the expertise of Barnes & Noble and Microsoft and push the market’s transition from paper books to e-books forward with more speed. The companies released a statement jointly, praising the move and the revolutionary nature of e-reading. Newco was launched in January, and it has put Barnes & Noble’s educational and digital departments together under one roof. Both companies are going to focus on their Nook eReader, currently neck and neck with Amazon’s Kindle for market share in the United States. In exchange for their $300 million investment, Microsoft will receive a 17.6% equity stake in Newco, with Barnes & Noble maintaining ownership of the remainder. Newco and Microsoft will have an added presence in all of Barnes & Noble’s brick and mortar stores, as well as online. The final name for the new venture has yet to be determined.
Microsoft is pushing hard on a number of fronts in advance of their release of the Windows 8 operating system. Windows 8 will be completely app-based, so the technology giant wants to insure that their refreshed OS will stand up to those on Amazon’s Kindle Fire and Apple’s iPad once they release their own tablet. William Lynch, the CEO of Barnes & Noble, went on record acknowledging the excitement of the joint venture. His interest is in taking advantage of the rising popularity of their Nook, especially as traditional booksellers shutter their doors all over the country. They want to increasingly be seen for their digital content offerings, not only in the consumer market but the educational market as well, and less for their storefronts. They see this deal as the way their content will reach all users of the Windows platform, which he numbered in the hundreds of millions.
Andy Lees, the president of Microsoft, added his praise to the deal. His interest continues to be pushing the online world to the forefront of information-gathering efforts. He sees this as the beginning of a shift that will literally place the strength of every library in the world into an individual’s hand. In his view, not only will this allow for speedier content acquisition, but also to faster and stronger innovation on all Windows devices. It’s a world where people would not have to hunt down new books in the local shops, but can instantly download what they’re looking for to their Windows-powered tablet devices from websites such as squeezedbooks.com. Publishers may not as quickly agree with their take, especially with what’s happened to music labels as downloads gained superiority. But either way, e-book reading is on the rise.