Editor’s Note: This article has first been published on edcetera – straight talk on edtech.
On Monday we learned that Microsoft will invest $300 million for 17.6% in a spinoff of Barnes&Noble’s digital and college business, which is called NewCo. This is quite an interesting turn of events, as Microsoft and B&N sued each other over Android patents just about a year ago. This new partnership settles the dispute and creates a new player that is now more valuable than B&N itself “in one fell swoop,” as Mary-Jo Folley wrote on All About Microsoft.
The announcement also cleared up some confusion about the appearance of an e-reader device in a recent presentation about Microsoft’s roadmap. Apparently, the Nook is this very device and chances are high that at least one version of the Nook might run Windows 8 or something similar.
Interestingly, this was all foreshadowed by moving Microsoft’s former head of Windows 8 development to “unspecified special projects” late last year and the roots of the partnership seem to go even deeper. Mary-Jo writes that
One of my contacts had told me a while back that Microsoft was working on an e-reader with B&N. The plan supposedly was that Microsoft would build the e-reader and B&N, the bookstore. Supposedly, my contact said, B&N dropped out, and shortly thereafter, Microsoft was working on the Courier, which could double as both a notetaking and reading device.
All very interesting stuff.
About ten hours before the news broke I came across an article on Forbes by Tim Wrostall in which he asked if B&N should break off the Nook business. Obviously, he did not want to break the embargo, so he wrote a “what if” thought play. The interesting point he makes is the connection of Nook and McGraw-Hill through Jana Partners.
If the Nook, through the Jana connection, could be sold with a captive textbook market place, courtesy of McGraw Hill, as well as an arms-length bookshop relationship with Barnes & Noble, the deal has the potential to create a mini-Amazon, and through internationalisation, a genuine force in eBooks as well as in tablets generally.
Another piece of the partnership is a deep integration of the Nook Book Store into Windows 8 – hence a similar approach Apple has taken with iBook in iOS and Amazon with the Kindle Fire.
And taking into consideration that B&N has the most bookstores on campus,yesterday’s announcement of B&N CEO William Lynch adds another piece to the puzzle. Upcoming versions of the Nook are going to have NFC chips built in which will enable customers to purchase digital versions of books in-store just by tapping the dead-wood versions on the e-reader. That is clearly a convenience strategy to counter efforts like Amazon’s Student app that lets you scan barcodes of books, compare the price on Amazon, and directly purchase them there.
The reamining main question at this point is whether Microsoft is in it due to a true interest in the markets (e-books and college e-textbooks) or if it is all about the Android patents. Both options are equally valid to me, so all we can do is sit and watch how this partnership will evolve over the coming months, but it is clear that part of Microsoft’s strategy is to get as many partners and hence access to Android patents as possible.
So how does this affect the education space? Will we possibly be seeing some integration with Live@Edu/Office 365 for Education? Microsoft isn’t a leader in interactive content creation – are there ecosystem implications? This new business is supposed to be focused on education:
Newco will combine Barnes & Noble’s digital and college businesses, meaning the retailer’s Nook operations and its Nook Study software for students and educators will be a part of the undertaking.
With Windows 8 just around the corner it seems to me as if Microsoft is really trying to make up for the last years in which clearly other players have dominated the market in terms of innovation. Becoming a heavyweight in the digital media sector with their own media store (we also need to add SkyDrive in here) and a unified experience over multiple devices I am still positive about a renaissance of Microsoft.
And what the college e-textbook market concerns, competition amongst at least three big players (Apple, Amazon and Microsoft/NewCo) is better than relying on just two.
Christopher Dawson of ZDNet Education and I recorded a review:ed Special on the announcement on Monday. If you want to hear more about our personal thoughts on the partnership, you can watch or listen to the talk over on EDUKWEST.