Microsoft's Reported Interest In Nook Puzzles Partners

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Microsoft has offered to buy the digital assets of Nook Media from Barnes & Noble for $1 billion, according to reports.

The report by TechCrunch suggests that Nook Media would discontinue its Android-based tablet business by 2014, with third-party devices then distributing Nook content, citing internal documents obtained.

The reported interest was puzzling to several Microsoft solution providers, and it was not clear whether Microsoft would make Nook content exclusively on Windows 8 devices or whether competing platforms would be included.

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"My first reaction was 'What?' I thought it was a hoax," said Eric Gould, owner of Savage Systems, a Putnam, Conn.-based VAR. "For one, I'd like to think the Nook assets are worth more than $1 billion. That doesn't sound right. Historically, [Microsoft] is a software company. They don't know how to sell media and devices."

Savage added he's concerned not that users would need a Windows device to buy Nook content, but that Microsoft would restrict Windows devices to only buy from Nook.

"One good thing about Windows is that it's open to anyone. Would Amazon and any other MP3 store stop working? I think that would lessen people wanting to own a Windows 8 tablet," he said.

William Adams, principal at ACS Services, an Easton, Mass.-based solution provider, said Microsoft should direct its efforts behind existing tablet devices and manufacturers.

"The tablet market is crowded with iPad, HP, Google, etc. Personally, having seen the HP Elite Pad -- I just bought one -- I think that Microsoft should put all their efforts behind HP, let them do what they do best, the tablet, and stick to making Windows 8 more user friendly," Adams said. "I think that's where the OS is missing the boat: People can't get past 'Go' with it based on the look. You can't go from 15 years of the Start button to the 'tile' look."

Jiashi Duan, vice president of ApexCompu, Malvern, Pa., said he's not surprised that Microsoft might purchase Nook because Microsoft had already made a significant investment in Nook. But he's still not sold whether Microsoft can help Nook, or vice versa.

"If they own it, maybe they can do something with it. Maybe they'll get more serious about [Windows] RT because nobody wants to do RT," Duan said. "RT has not done very good so far. Maybe they want to beef it up."

Duan said he didn't think Nook would have a big impact on Windows 8, which he expects will become more popular over time. "Given Microsoft's track record, Windows 8 will do [fine]. Any other company that said they've sold 100 million [licenses] already would get 'Wow.' But Microsoft gets nothing," he said.

Last fall, Barnes & Noble released its new Nook HD and Nook HD+ tablets powered by Android.

Microsoft's stock fell slightly after the reports surfaced, down 10 cents or to $32.90. Barnes & Noble shares skyrocketed more than 21 percent to $21.60 in early-afternoon trading.


This story was updated on May 9, 2013, at 1:29 p.m. PST, to include comments by Savage Systems' Eric Gould made after press time.

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