There has been a massive leak of internal documents today from Barnes and Noble that claim Microsoft has made a one billion dollar offer to buy the entire Nook brand. This includes all the ebooks, tablets, and e-readers that the company currently offers.
Barnes and Noble has sold over 10 million Nook devices since first launching in 2009. Over 7 million people are actively using the eBook Store, downloading apps, or purchasing television and movies. It is no secret that Barnes and Noble is losing money with losses of $262 million for the fiscal 2012 year. B&N is also projected to lose an additional $360 million in 2013, so things look dire.
The mounting losses have spurned the vultures to encircle the embattled brand, with Pearson and Microsoft buying equity stakes in the Nook Media venture. This investment basically spun the digital division away from the brick and mortar stores. Microsoft kicked in $300 million at the time and gave B&N an advance of $190 million to make Nook branded apps for the Windows 8 OS.
Some of the documents also point to Barnes and Noble suspending all Android tablets in 2014 and instead licensing out its content platform to eligible buyers. This would be basically be a white label solution for conglomerates like HTC, Samsung, Acer, and others. The intention is for them to operate their own ebook stores that would tap into the Nook ecosystem to facilitate content delivery. Going this route would cut down on the hardware losses, which due to competition from Amazon, Kobo, Samsung, and Google makes sense. Its very hard for companies in today’s climate to make ANY money from hardware and instead have to rely on digital sales.
Microsoft owning a large e-reader, tablet, and ebook store could really help grow its Windows 8 brand. It would stimulate sales for its line of smartphones and tablets using the OS. It could integrate the entire Nook ecosystem to be bundled into the next build of Windows RT and Windows 8.