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Barnes & Noble and Microsoft finalise deal, unveil Nook Media subsidiary

Barnes & Noble and Microsoft are now officially partners; the two firms closed a deal first announced in April and revealed that their newly formed venture will be known as Nook Media.

Nook Media includes Barnes & Noble's digital and college businesses and a $300 million (£185 million) investment from Microsoft.

"As demand for digital content continues to increase, we are focused on bringing ground-breaking reading and learning content and technologies to more people in more formats than ever before, including the imminent launch of our exceptional Nook reading application for Windows 8," William Lynch, CEO of Barnes & Noble, said in a statement. "We look forward to working closely with our new partner Microsoft to add value to their innovative new platform by bringing great reading experiences and one of the world's preeminent digital bookstores to millions of Windows 8 users."

"Nook Media is a leader in developing the next generation of digital reading and we look forward to the company bringing one of the world's largest digital libraries to Windows 8 devices via their upcoming Windows 8 app," said Andy Lees, president at Microsoft. "We are also excited by Nook Media's product roadmap and expansion into markets around the world as demonstrated by their recent launches in the United Kingdom."

The deal gives Microsoft a 17.6 per cent equity stake in Barnes & Noble, with the retailer holding the remaining shares.

The two firms made no announcements about what their next steps might be. Barnes & Noble will now conduct a "review of strategic options," but the company said it "does not intend to comment further regarding the review unless and until a decision is made."

The April deal brought an end to a patent dispute between Barnes & Noble and Microsoft. In March 2011, Redmond filed suit against Barnes & Noble for patent infringement regarding its Android-based Nook eBook readers. Microsoft holds patents relating to navigation and how websites display content; technology used on the Android platform. Barnes & Noble disputed the case, but in January, an International Trade Commission (ITC) judge threw out Barnes & Noble's antitrust claims against Microsoft.

Barnes & Noble and Nook Media will now have a license for Microsoft's patents for the Nook eBook reader and tablet products.