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Microsoft goes e-reading

April 30, 2012

Microsoft will pump $300 million (226 million euros) into Barnes & Noble in efforts to beef up the US bookseller's digital reading products. The move is aimed at challenging tablet computer giants Apple and Samsung.

https://p.dw.com/p/14nBf
ARCHIV - ILLUSTRATION - Ein iPad Tablet mit einer Bücherwand auf dem Bildschirm, im Hintergrund ein Bücherregal (Aufnahme vom 06.10.2011). Apple stieg im vergangenen Jahr mit der Markteinführung des iPad-Tablets in das E-Book-Geschäft ein. Auf Reisen sind E-Books ein handlicher Ersatz für dicke Schmöker. Der Markt ist heiß umkämpft. Nun nimmt die EU-Kommission Apple ins Visier. Der Computerriese könnte gemeinsam mit fünf Verlagen ein Kartell gebildet haben, lautet der Verdacht. Foto: Marc Tirl dpa (zu dpa 1246 vom 06.12.2011) +++(c) dpa - Bildfunk+++
Image: picture-alliance/dpa

With the investment, Microsoft will acquire a 17.6 percent share in a joint unit with Barnes & Noble, aimed at accelerating "the transition to e-reading, which is revolutionizing the way people consume, create, share and enjoy digital content," the two companies said Monday.

The US computer giant's move comes after Barnes & Noble in January announced plans to spin off its digital business in an effort to maximize value for its shareholders. In recent years, the New York-based bookseller's market share has plummeted.

According to the joint statement, it was not yet decided if the new unit would be an independent company. There was also not agreement about the joint venture's name.

However, analysts expect the new company to be worth $1.7 billion (1.28 billion euros) after the investment is complete - more than double the current value of Barnes & Noble.

In the hope of accelerating "e-reading innovation across the broad range of Microsoft devices," Microsoft President Andy Lee said the company was "at the beginning of a journey that will impact how people read, interact with, and enjoy new forms of content."

Market shakeup

In February, Barnes & Noble unveiled a new version of its Nook tablet in an attempt to catch up with Amazon's Kindle Fire. Amazon's device recorded sales of 3.9 million e-readers in 2011, while the former generation of Nook tablets sold 3.3 million units.

However, both companies are trailing far behind Samsung and Apple in the tablet computer market. Samsung sold 6.1 million units in its Galaxy line, while Apple sold a whopping 40.5 million iPads last year.

Microsoft has made software for tablet computers before, and is expected to run its new Windows 8 operating system on the Nook tablet.

The new version of Windows is said to be tailor-made for the phone-style processors used in tablets. Reviews of the pre-production software say Windows 8 let allow users do things they cannot do on an iPad, such as running two applications side by side on the same screen.

uhe/srs (dpa, AP, AFP)