TechCrunch reports that Microsoft MSFT may spend $1 billion to buy Nook outright from Barnes & Noble NE. In the pre-market Barnes & Noble stock moved up as much as 30% and was still higher by nearly 20% on the day in the afternoon. Microsoft has an existing investment in Nook of about one-sixth of the enterprise.
Barnes & Noble has done an incredible job with Nook even though it is nowhere near as popular as the Kindle lineup from Amazon or iPads from Apple AAPL.
Amazon started as a book seller. No wonder it is the leader in the eReader market with its Kindle line of devices. Barnes & Noble, with a century of pedigree in books, is the number two player in the e-reader market. However, the Nook’s share has been stagnant. In contrast, Apple has been rapidly increasing its share of the market.
Of special note is that Nook devices run on Google GOOG Android. Tablets from Barnes & Noble, Nook HD and Nook HD+ have been weak products in terms of market share against other Android tablets and iPads.
The question is what will Microsoft do with Nook? In my analysis, Microsoft will probably simply kill it on purpose. The reason is that Microsoft will have no interest in continuing to sink money into a weak performing Android line of devices. This will indeed be good news for Amazon and Apple. Killing off any competition is good….Read more at Forbes