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Microsoft's Investment In Barnes & Noble May Save It

Microsoft announced yesterday that it will invest over £185 million in Newco, a new company started by Barnes & Noble, a sum which may prove to be the nudge to revive the book seller's revenue.

This means that Microsoft will hold 17.6 per cent of the shares from a company that aims to significantly expand the eBook reading business. The Redmond-based giant claimed the decision to be a catalyst for the "transition to e-reading, which is revolutionizing the way people consume content".

Forbes analysed the investment and according to Reuters, Newco is already worth £1.04 billion. Other than pure numbers, the software giant may have invested to also close all remaining patent wars.

Moreover, with the launch of Windows 8, Barnes & Noble may develop an application which will allow users to enter the Nook market and purchase digital content, as e-Books, magazines and newspapers.

All of these opportunities, as well as the newly received cheque, will help B&N spin its £6.78-million loss registered in the last nine months of 2011 as well as its continually dropping shares.

During this same period, the company invested £19.72 million in a product that returned only £16.64 million, with its total stock value reaching the £507 million mark last Friday.

Microsoft's move will surely revive the company but sources don't expect the same rise as Apple had, mostly due to the lack of a brilliant mind such as that of Steve Jobs.

Source: Forbes