The news is that Microsoft (MSFT) +0.02% will invest $300 million in Barnes & Noble (BKS) +51.68% . Microsoft is not spending $300 million because it is interested in books.
The real reason behind Microsoft’s move is an attempt to disrupt the stranglehold Apple (AAPL) +0.22% and Amazon (AMZN) -0.39% have on tablets.
Breaking up the tablet stranglehold
There are dozens of computer tablet vendors. Beyond Apple, Amazon, and Barnes & Noble, the market share of other vendors is tiny. Apple’s iPad dominates the high end. Amazon’s Kindle dominates the low end.
Even though Google (GOOG) -1.65% Android-based phones have become very popular, Android-based tablets, with the exception of Kindle and Nook, have for the most part met a cold reception.
Microsoft dominates the desktop, but its market share in tablets has been driven close to zero.
Why it’s a brilliant move
Some will say that Microsoft’s move is desperate and that the future of the Nook is hopeless. I do not know the future, but in my opinion, this investment by Microsoft is brilliant.
For Microsoft, $300 million is pocket change. This is a very low risk way for the software giant to break into eBook readers and get a running start for its upcoming Windows 8 operating system.
The deal may lead to a Windows 8-based Nook. One of the big challenges to Microsoft with Windows 8 is going to be its ability to attract enough apps that consumers want.
With today’s announcement, it would not be surprising for Barnes & Noble to introduce a Nook app for Windows 8-based phones, such as the Nokia (NOK) -0.54% Lumia 910, and also for Windows 8-based tablets….Read more at MarketWatch
