B&N and Microsoft
As usual when this sort of thing happens, it’s useful to play “Once Upon A Time”.
Once upon a time, Barnes & Noble was up against Amazon. It was 1998 and they needed capital. So they partnered with Bertelsmann, who took a 50% stake in BarnesandNoble.com (for $200 million). After the IPO, Barnes & Noble bought Bertelsmann out – it was a limited partnership for a specific purpose. B&N.com needed cash to get it past the IPO phase.
As with so much these days, everything old is new again. Now it’s the Nook business that needs a strategic partnership prior to being spun off (and yes, I do believe the Nook arm will be spun off separately from the B&N mothership). This time Microsoft is ponying up $300 million (for which it is only getting 17.6% of the stake – which tells you a lot about the market capitalization and is the biggest red flag regarding a possible spinoff). According to the Wall Street Journal:
For the bookseller, the investment will mean access to more international markets, since Windows 8 is used across the globe. Currently, besides the Nook device, the Nook book-buying application is available only on the iPad and Android devices.
This tells me two things: (1) B&N is looking to expand its digital business internationally (which dovetails with the work Patricia Arancibia’s group is doing at B&N.com) and (2) B&N will continue to be available for Android devices because they announced nothing to the contrary today.
I’m reluctant to speculate more at this point.
Also…Newco? SERIOUSLY? Did the press release not get out of boilerplate before it went live?