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Microsoft invested $300 million in Barnes and Noble new subsidiary


Microsoft today announced the development of a new strategic partnership with Barnes and Noble. The partnership will lead in formation of a new subsidiary of Barnes and Nobles and concentrate on developing new technologies which will enhance the experience of Digital consumption.

There is no doubt that instead of competing, collaboration is the best strategy if it can provide the synergy which is required. Barnes and Noble is lagging way behind their arch competitor Amazon and Microsoft has never been able to make any signification development in the world of digital content consumption. Both of these companies were involved in patent lawsuits. Microsoft has created lots of strategic partnership in few years and Barnes and Nobles is the latest addition.

Microsoft will invest in a new subsidiary of Barnes & Nobles whose name is yet to be decided. As per the information provided in the newsroom of Microsoft will invest $300 million in the newly form subsidiary of Barnes and Nobles and will own 17.6% stake in the newly formed subsidiary. Barnes and Noble will own 82.4% stake in the subsidiary.

Mutual benefit for Microsoft and Barnes and Noble:

1. Instead of spending money on fighting a patent lawsuit both of these companies will collaborate and compete with their arch competitors.

2.There will be a Nook application for windows 8 that will extend the reach of the Barnes and Noble to the hundreds of millions of customer throughout world.

3. The newly formed subsidiary will target education business as it is formed with the inclusion of Barnes and Nobles college business.

As we can see this partnership is based on a long-term vision on the future of the consumption of digital content. The concept of digital content has undergone a paradigm shift in last few years and the sectors which can be included in to  digital consumption is:

1. Books.

2. Music.

3. Movies.

4. News.

Literally we are pretty sure that Microsoft and Barnes and Nobles will look in to capturing a significant market share of this huge and growing market instead of only looking to grow in the market of reading.

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