Microsoft Looks to Acquire Nook Media For $1B [REPORT]

Microsoft surface book 2efes / Pixabay

Microsoft Corporation (NASDAQ:MSFT) is planning a bid of $1 billion for the digital assets of Nook Media LLC. The software giant will exchange preferred units in Nook media, which comprises of college book division, says a report by Eric Eldon and Ingrid Lunden from Techcrunch.

Microsoft Looks to Acquire Nook Media For $1B [REPORT]

Microsoft bid details

As per the report, the Nook media is looking forward to halt its Android based tablet business towards the close of fiscal 2014. The company will be working on the model, which will distribute its content through apps on “third-party partner” devices.

There is no confirmation, however, over the third party tablets, whether it would be a Microsoft Corporation (NASDAQ:MSFT) Windows, or of any other platform or both. As per the report these third party documents will get launched in 2014.

Acquiring Nook, A logical Step

Microsoft declared that it is looking forward to work in collaboration with Barnes & Noble, Inc. (NYSE:BKS)’s on its Nook devices and content in April 2012. Microsoft Corporation (NASDAQ:MSFT) gave an advance of $180 million to design content for its Windows 8 devices, which Nook is working on. The step to buy the digital assets of Nook Media was the obvious step after such decision.

The total sales of the Nook devices till date stand at 10 million, along with tablets and e-readers. The subscriber base is 7 million. For the Windows 8 version of Microsoft, the company has seen only few enthusiasts, up till now. However, it has sold over 100 million licenses for the OS till now. The Nook app can be accessed at all major platforms at present including Android, iOS and Windows.

In October 2012, Nook Media parted with its retail division and Microsoft Corporation (NASDAQ:MSFT) acquired 16.8 percent stake by investing $300 million in the company. The purpose of the partnership was to get B&N content on the Windows 8 tablets. Jamie Iannone, president of Digital Product at Nook Media said, “its hardware, software, content: everything Nook is part of Nook Media. There will always be a long-term relationship between Barnes & Noble and the Nook business.”

The new models of the devices at Nook division have been sold at a discount due to slow holiday season. The hardware of the company has lost its position in terms of market share and revenue.

According to report the value of Barnes & Noble, Inc. (NYSE:BKS) is $1.66 billion. At the time of formation, the valuation of the division was $1.7 billion. If the deal with Microsoft Corporation (NASDAQ:MSFT) successfully closes in at $1 billion then the purchase will be less than the price it was previously bought at.

There was not any comment over the news from Microsoft Corporation (NASDAQ:MSFT) and Barnes & Noble, Inc. (NYSE:BKS).

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About the Author

Aman Jain
Aman is MBA (Finance) with an experience on both Marketing and Finance side. He has worked as a Risk Analyst for AIR Worldwide, and is currently leading VeRa FinServ, a Financial Research firm. Favorite pastimes include watching science fiction movies, reviewing tech gadgets, playing PC games and cricket. - Email him at [email protected]

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