Redmond-based Microsoft is not going to stake the future of Windows 8 on a "build it and they will come" strategy. Today the tech giant announced that it had completed a deal with book retailer Barnes & Noble to invest in a new subsidiary, NOOK Media LLC.
The price of admission was $300 million. For that amount Microsoft will get an equity stake of pproximately 17.6 percent. That creates a valuation of the new entity of around $1.7 billion.
What Microsoft really wanted, however, was content – in this case, a commitment that B&N books and an app will appear for the Windows 8 platform.
"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, in the official announcement.
"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," said William Lynch, CEO of Barnes & Noble.
Unlike Amazon and its Kindle line, which Microsoft no doubt sees as a competitor (as does B&N), Microsoft has no direct line to content. Apple was able to avoid this pitfall by being the first to launch a popular tablet. This forced all the major media retailers to fall in line.
The danger here for consumers is that as retailers line up with platforms there may be a siloing effect as alliances keep content from being available across platforms.