Microsoft just invested $300 million in a spin off company from Barnes and Noble, which includes what I feel is the future for the chain bookseller. NewCo, which is its temporary name and will certainly change, will contain all the Nook digital portion of B&N’s business, plus B&N College. Microsoft’s investment earned it a 17.6% equity stake in NewCo. And most importantly, this new company can be spun off from B&N (even to Microsoft) at any later date.
Plus, get this, the new company is already valued at $1.7 BILLION. In comparison, B&N is valued at around $760 MILLION.
Just this past weekend at a “Future of Publishing” lunch panel at the Redwood Writers Conference I predicted that B&N would not be here in 5 years if they continued along the same path they were going (lots of expensive brick and mortar stores and a limping Nook business). And I’ve been wondering for awhile now why Microsoft was not getting into the eBook game. Now I have my answer. How very interesting this publishing business has become.
For a more complete analysis, including today’s press release on the deal, go to TechCrunch.