Microsoft and Barnes & Noble form Nook e-book platform partnership

MicrosoftMicrosoft and Barnes & Noble today annnounced a new partnership in a new Barnes & Noble subsidiary focused on e-reading technologies. The new subsidiary, called Newco until a final name is found, will consist of the Nook unit as well as Barnes & Noble’s college textbook business. Microsoft will make a US$300 million investment in Newco for a 17.6% equity stake.

“The shift to digital is putting the world’s libraries and newsstands in the palm of every person’s hand, and is the beginning of a journey that will impact how people read, interact with, and enjoy new forms of content,” said Andy Lees, President at Microsoft. “Our complementary assets will accelerate e-reading innovation across a broad range of Windows devices, enabling people to not just read stories, but to be part of them. We’re at the cusp of a revolution in reading.”

As part of the new partnership, the two companies also announced that they have settled their patent litigation. Barnes & Noble and Newco will now have a “royalty-bearing license under Microsoft’s patents for its NOOK eReader and Tablet products.” The litigation had been tied to Barnes & Noble’s use of Android on its Nook tablet.

Microsoft will bundle the Nook digital bookstore with Windows 8 when it launches later this year. The move will significantly broaden its exposure both in the U.S. and globally.

Read more: Microsoft