Microsoft Could Pay $1B for B&N’s Nook Unit

by Christopher Freeburn | May 9, 2013 12:07 pm

Microsoft Could Pay $1B for B&N’s Nook Unit

NookTablet Microsoft Could Pay $1B for B&Ns Nook Unit[1]Barnes & Noble (NYSE:BKS[2]) shares surged more than 15% in Thursday midday trading after a report surfaced that Microsoft (NASDAQ:MSFT[3]) is bidding to acquire its Nook Media division[4].

According to TechCrunch, internal documents from Barnes & Noble indicate that Microsoft has offered the bookseller $1 billion to purchase its Nook tablet and digital media business. The software giant is not interested in the unit’s college text book division.

The move comes as Barnes & Noble is planning to withdraw from the tablet business to concentrate on selling e-books that can be read on apps installed on other manufacturer’s devices. The documents reveal that Barnes & Noble will end production of its Nook tablets by the end of the 2014 fiscal year.

Nook tablets run on a version of Google‘s (NASDAQ:GOOG[5]) Android operating system and compete with Amazon‘s (NASDAQ:AMZN[6]) Kindle tablets, as well as Apple‘s (NASDAQ:AAPL[7]) iPads. Roughly 10 million Nook tablets have been sold. Microsoft took a 17.6% stake in Nook Media last year[8] after it split from Barnes & Noble’s retail book division.

Holiday sales of the Nook proved lower than expected, prompting speculation that Barnes & Noble might seek a buyer for the unit[9].

Earlier this month, Barnes & Noble added Google’s Play app store to the Nook tablet[10], boosting the number of apps available to Nook users from about 10,000 to more than 700,000.

Shares of Microsoft slipped slightly in Thursday midday trading.

Endnotes:
  1. [Image]: http://investorplace.com/wp-content/uploads/2011/11/NookTablet.jpg
  2. BKS: http://studio-5.financialcontent.com/investplace/quote?Symbol=BKS
  3. MSFT: http://studio-5.financialcontent.com/investplace/quote?Symbol=MSFT
  4. bidding to acquire its Nook Media division: http://techcrunch.com/2013/05/08/microsoft-mulling-nook-media-llc-purchase-for-1-billion/
  5. GOOG: http://studio-5.financialcontent.com/investplace/quote?Symbol=GOOG
  6. AMZN: http://studio-5.financialcontent.com/investplace/quote?Symbol=AMZN
  7. AAPL: http://studio-5.financialcontent.com/investplace/quote?Symbol=AAPL
  8. stake in Nook Media last year: http://investorplace.com/2012/10/investors-optimistic-on-barnes-noble-over-nook-success/
  9. might seek a buyer for the unit: http://investorplace.com/2013/01/nooks-next-chapter-a-buyout/
  10. added Google’s Play app store to the Nook tablet: http://investorplace.com/2013/05/google-play-app-store-now-available-to-nook-hd-users/

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