Earlier this week New York City based book retailer and Microsoft announced the spinoff of the Private Brand Nook ereader into a “strategic partnership” on e-reading, focused on the creation of a new B&N subsidiary that will spin off that company’s digital and College businesses. The move sets a new bar for retailers and their Private Brands who have continually focused the conversation on “me too” or “I am the same – really and I am cheaper.” The conversation then moves begins to focus on brand as differentiator and brand as asset. If you are not sure whether you are building your brands as asset you can now ask the simple question, “Is anyone willing to invest in my brand?”
The final name of the new business has not yet been determined, but it has been revealed that Microsoft is investing $300 million for a 17.6 percent stake. Among the first benefits of that cash injection will be a Windows 8 Nook application.
Provisionally referred to as “Newco,” the co-owned subsidiary will continue to have a close relationship with Barnes & Noble’s. B&N’s educational operations are said to be “an important component” of the makeup of Newco, with the parent companies keen to spread and popularize Nook Study software. Microsoft’s Andy Lees welcomed the news by pointing out that the two companies’ “complementary assets will accelerate e-reading innovation across a broad range of Windows devices.” As far he’s concerned, “we’re at the cusp of a revolution in reading,” and Microsoft and Barnes & Noble are taking the steps to move us forward.
The move comes as new data from ComScore shows that Amazon’s Kindle Fire tablet is now the leading Android tablet, with 54% market share as of February 2012.
This partnership is a direct shot at both Amazon and Apple for the consumption and dissemination of digital content. Both the Private Brand Kindle Fire from Amazon and the line of iPads from Apple have seen increasing sales – 15.43 million iPads sold in 1st fiscal quarter 2012.