It was sort of a shotgun wedding to begin with. Two years ago, Microsoft and Barnes and Noble, after fighting over patent disputes related to Microsoft’s claim on parts of the Android operating system, joined together to form a “NewCo”, what was to include Barnes and Noble’s digital and college businesses and reportedly bringing a long awaited new e-Reader to Microsoft users.
After a number of fits and almost starts, including redoing the agreement in March of this year that released Barnes and Noble from having to produce a Windows Phone app and discontinued the use of its Windows app, Barnes and Noble today finally threw in the towel completely, dissolving the partnership.
In its 2nd Quarter Earnings press release, Barnes and Noble outlined the end of the relationship:
The Company filed a Form 8-K with the Securities and Exchange Commission stating that Barnes & Noble and Microsoft have agreed to terminate their commercial agreement including any associated obligations for international content acquisition and sale. Such termination will allow the Company to continue its rationalization of the NOOK Digital business and enhances Barnes & Noble’s operational and strategic flexibility. The termination also relieves Microsoft of any obligation to continue to fund support and other payments set forth in the commercial agreement between the partners.
Additionally, the Company stated that it had entered into an agreement with Microsoft to acquire its entire preferred interest in NOOK Media, LLC.
Nook revenues were down some 41% over last year’s 2nd quarter results, and while Barnes and Noble still faces some tough choices about the Nook, this latest news throws into question what if anything Microsoft plans to do.
Mary Jo Foley reports that her sources are telling her that Microsoft is bowing out of the e-Reader space, at least for now, and although at one time there was a group called “Xbox Music, Video, and Reading”, the company seems to have backed off from going head to head with Amazon and its Kindle.
