More Details Leaked on the Microsoft, Barnes & Noble Deal
Earlier today it was announced that Microsoft would be paying $300 million for a share in a new Barnes & Noble subsidiary. Now, TechCrunch has found an 8-K form filed with the Securities and Exchange Commission (SEC) by Barnes & Noble that reveals some more details about the new partnership.
Based on the form, Microsoft will be paying more than the $300 million they announced this morning. In addition to that sum, the company will pay NewCo, the tentative name of the new subsidiary, $60 million each year for the first three years after a NOOK app for Windows 8 is released. This payment is in connection to revenue sharing between Microsoft and NewCo, and may be deferred “under certain circumstances.” Also, Microsoft will pay the company $25 million each year for five years to acquire “local digital reading content” and for development of technology
Microsoft must see the e-book market as potentially very profitable if it can throw this kind of money at Barnes & Noble. But why enter the market instead of let Amazon solve the problem of Windows 8 having an e-reader app? There is already a Windows Phone version of the Kindle app. What sort of technology is Microsoft hoping that NewCo will develop? All of this speculation really does boil down to one question, asked by both TechCrunch in its article and myself when the deal was announced this morning: will we see a NOOK running Windows 8?
TechCrunch got statements from both companies, but their answers were vague non-denials. Leave a comment below and let me know your answer to that question.