Microsoft and Barnes and Noble partner to challenge the Kindle and iBookstore

Barnes and Noble has gained an unlikely suitor to help it compete in the ebook market. The company has just announced a strategic partnership with Microsoft that will see Barnes and Noble create a new subsidiary that will house its nook and College business lines. Microsoft will be forking over $300 million for a 17.6% stake in the company, putting the new subsidiary’s value at around $1.7 billion. The remaining 82.4% stake would solely be held by Barnes and Noble.

The move ensures that the next version of Windows Phone will be getting more content by way of the nook Store, putting Microsoft in a better position to compete not only against the likes of Android and iOS smartphones and tablets, but also hybrid ereader/tablet devices such as the Kindle Fire. The first benefit Microsoft will see from the partnership is a Windows Phone 8 version of the nook application due later this year, furthering the tradition of Microsoft paying developers to build programs for the Windows Phone platform.

Microsoft is also believed to be targeting Apple’s large move into etextbooks, as Microsoft has long been courting the educational market. Apple has a strong advantage here, however, with tens of thousands of educational programs already available for iOS, and partnerships with several key textbook makers already inked. Microsoft will have its work cut out for itself if it is to compete with Apple in this arena.

The move has several potential implications for the nook line. The entire nook series of devices is based on Google’s Android platform, and a strong partnership with Microsoft could bring about Windows Phone-powered nook devices the next time we see a refresh in the tablet line.

What the partnership will fully mean remains to be seen. We should learn more details of the partnership in a conference call set for later this afternoon. What would you like to see in a Microsoft-Barnes and Noble partnership?

[via TechCrunch]

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