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Speculation: Microsoft to Buy Nook Media for $1bn ?
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  • May 9, 2013
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nook-windows-8[1]Microsoft could be getting back into the ebook biz.

Techcrunch is reporting today that Microsoft has made an offer to buy out B&N’s controlling interest in Nook Media. According to unnamed documents, MS is willing to put up $1,000,000 to gain control of the beleaguered Nook Media.

The docs reportedly reveal that Nook Media plans to retire their current line of hardware by the end of the 2014 fiscal year and transition to a model which focuses on getting Nook apps onto partner devices and 3rd-party hardware. Obviously that also indicates the coming end of the Nook ereaders, a detail that comes as no surprise given the recent rumor that B&N passed on using the new 6.8″ E-ink screen on a Nook Glow HD.

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So is this story true? I think so, but the more important question is whether B&N will take Microsoft up on their offer.

Microsoft has clearly been interested in Nook Media ever since the subsidiary was formed last year. That’s why MS put up $300 million for a minority share, so today’s news would make perfect sense.

And the price also makes sense; while some might think that it undervalues the $1.8 billion value that B&N assigned to Nook Media, I always thought that B&N had overpriced Nook Media by a significant margin. Furthermore, a billion dollars doesn’t mean the same thing to MS as it would to B&N; Microsoft has over $60 billion in cash on hand. They won’t miss a billion here or there.

But the important question here is whether B&N will take Microsoft up on the offer. I expect them to do so, yes.

This is the kind of deal that B&N should have made this time last year, but they didn’t. B&N had just come off a not entirely satisfactory holiday season which made them decide to spin off Nook Media, but instead of selling off the Nook B&N instead took a piecemeal investment from Microsoft.

I’m afraid that  if B&N repeats that mistake it will be the end of the Nook platform.

But I’m not too worried because that probably won’t happen. Remember a few months back when Len Riggio wanted to buy the B&N retail stores and split the company in two? He didn’t want Nook Media, just the stores, so today’s deal is almost exactly what he wants – almost.

It’s not quite the deal he wanted back then – MS is trying to buy the Nook but not the B&N College bookstores.  Those would stay with B&N (according to the rumor). Still, I expect Riggio to take Microsoft up on the offer. It’s close enough to what he wants that he’d be a fool to pass it up.

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