Microsoft Aims to Gobble up Parts of Nook Media for $1B USD, Nook Tablets to Die
May 9, 2013 11:29 AM
comment(s) - last by
(Source: Getty Images)
Move would reposition Nook media as solely an e-book seller
While the Nook HD+ is a well-known budget Android tablet, the days of the Nook may be numbered. According to a report by
, internal documents indicate that Microsoft Corp. (
) is offering Barnes & Noble, Inc. (
) a $1B USD buyout to acquire some of the assets of Nook Media LLC, which Microsoft will then look to reposition as the go-to digital college textbook source across its platforms.
I. Microsoft Looks to Scavenge Juicy Innards From Struggling Nook Media
have been a double-edged sword for Barnes & Noble. While Amazon.com, Inc. (
) showed the market that e-books are a ticket to higher profits, B&N's Nook -- launched
during the 2009 holiday season
-- has been
largely a money loser for B&N
. The company added
a color Android tablet
(the Nook Color) during the holiday 2010 season, which was followed by
the Nook HD
The platform has seen it successes, selling 10 million units to date. While far from Amazon's Kindle sales, Nook's active base of 7 million subscribers is certainly worth something. But the ongoing losses have caused the company to question the utility of that asset.
The book seller had
looked to spin off the unit
, but stabilized when
Microsoft injected $300M USD
into the "Newco" joint e-book venture. Microsoft owned approximately 16.8 percent stake in Newco, while B&N owned 83.2 percent ($1.49B USD) of the venture as of its April 2012 launch.
However, since then the joint venture has devalued as its e-readers continued to struggle in sales,
driving losses at B&N
currently considering going private
, may be tempted to unload parts of its digital business to offset these losses.
The bid indicates that the Nook partnership has significantly devalued in recent months. The documents indicate that B&N is worth $1.66B USD, while Nook Media is valued at $1B USD. That's significantly less than the original $1.7B USD valuation, or the $1.8B USD valuation from January when UK-publisher Pearson PLC (
) bought a 5 percent stake in Nook Media for $85M USD.
II. What's Next
If Microsoft's bid succeeds, it will gain select units of Nook Media -- reportedly the college textbook division. Nook Media will keep the e-reader and core e-book business.
But documents reveal that the current plan is a phase-out of Nook Media's titular hardware offerings. Nook may soon no longer make Nooks.
Nook Media hopes to return to profitability by 2017. [Image Source: Reuters]
Android tablets will die out first, being discontinued by the end of next year (2014). The lower-priced E-INK readers will continue to be sold into 2015, but are expected to suffer a quiet death as customers abandon the power-efficient, but aged form factor for glistening tablets.
The documents indicate that Nook Media will lose $360M USD this fiscal year, following losses of $262M USD last year in B&N's fiscal 2012, which ended in April. But with the hardware phaseout, Microsoft predicts the unit will recover to $362M USD in annual profit by 2017.
Nook e-book apps are currently available on every major platform -- Android, iOS, Windows, and OS X.
This article is over a month old, voting and posting comments is disabled
RE: This doesn't make sense
5/9/2013 2:09:33 PM
They could integrate support for it into the OS, like they have with the Zip format, and allow college students to use Windows tablets, including ARM tablets, for their textbooks. This would, by extension, allow students to copy and paste quotes from the books they read into papers instead to having to retype it or look it up online. This would be above and beyond the capabilities of Apple's products for college students.
In short, it would encourage college students to use Windows based systems instead of Apple based systems. That's right along their core business area.
Personally, I'd love to see Apple fail again. I despise that company.
"I f***ing cannot play Halo 2 multiplayer. I cannot do it." -- Bungie Technical Lead Chris Butcher
Nook HD+ Gets Big Price Drop ($179/$199) to Go Along with Google Play Store Support
May 5, 2013, 3:22 PM
Barnes & Noble Posts Quarterly Loss Thanks to Nook, E-Books
February 28, 2013, 8:50 PM
Barnes & Noble Chairman Wants to Take Company Private
February 26, 2013, 10:52 AM
Barnes and Noble Takes Jabs at Amazon with Nook HD, HD+ Tablets
September 26, 2012, 5:53 AM
Microsoft, Barnes & Noble Team Up for "Newco" E-Book Subsidiary
April 30, 2012, 3:42 PM
MSI Unveils 3K Resolution GT60 Gaming, Workstation Notebooks
December 5, 2013, 11:00 AM
No iPhone for Obama Due to Security Concerns
December 5, 2013, 9:57 AM
New Reversible "Type-C" USB Plug Coming in Mid-2014
December 4, 2013, 10:38 AM
IDC Reports PC Shipments Will Decline by Double Digits in 2013
December 4, 2013, 10:18 AM
Canon EOS M2 Digital Camera Unveiled In Japan
December 3, 2013, 11:10 AM
Applebee's to Place Tablets at Each Table for Paying the Check, Ordering Food
December 3, 2013, 10:01 AM
Most Popular Articles
NSA Snares Americans' Porn Viewing Histories in Effort to Target Muslims
December 1, 2013, 9:00 PM
Coalition of 20+ Tech Firms Backs MRAM as Potential DRAM, NAND Replacement
November 29, 2013, 11:59 PM
Dow Chemical to NYC City Council: You Don't Even Know What Styrofoam is!
December 2, 2013, 8:30 PM
Fed Up With Cheating OEMs, Microsoft Trolls Chromebooks in New Ad
November 27, 2013, 4:09 PM
OCZ Goes Bankrupt, SSD Assets are Targeted by Toshiba
December 1, 2013, 9:58 PM
Latest Blog Posts
Global Cyber Espionage Concerns Reveal Growing Cyber Armies
Nov 29, 2013, 11:04 AM
Is The Period Becoming an Expression of Anger?
Nov 26, 2013, 2:02 PM
NSA and Congress -- You Will Never Kill the Constitution, It's an Idea
Nov 10, 2013, 2:00 PM
AT&T Explores $100B+ USD Deal to Acquire Vodafone's European Operations
Nov 4, 2013, 7:34 AM
U.S. Army Developing Cyber, Electronic War Arsenal
Oct 31, 2013, 4:49 PM
More Blog Posts
Copyright 2013 DailyTech LLC. -
Terms, Conditions & Privacy Information