Microsoft And Barnes & Noble Settle And Partner Up
This morning Microsoft and Barnes & Noble have announced that they have come to a settlement agreement and bowing out of the potentially historic court patent battle. You may recall that Barnes & Noble was one of only two major holdouts to patent license agreements with Microsoft. The other being Motorola who are in the process of being bought by Google. But wait it gets even better if you’re in the mood for juicy announcements. Barnes & Noble announced that they are spinning off the Nook eBook division and partnering with Microsoft in the formation of a new company NewCo, which has yet to be named.
Crazy right?! I know I feel the same. I keep asking myself so is frenemies the new in thing for the tech industry? This is what happens when everybody, yes everybody, figures out what is at stake in the mobile market.
This is a blockbuster announcement because the immediate and future implications are massive. Not just for the two companies involved but for several industries. Up til now Amazon had been widening their lead on Barnes & Noble with the introduction of their popular Kindle eBook line and their Kindle Fire has taken the media tablet market by storm on the strength of their name recognition and their ability to run Android Apps. This partnership with Microsoft now allows for both companies to square off with their arch enemies with much better footing.
This is a move out of total left field and we’ll be sure to flush out our thoughts in a series of posts coming up throughout the day. Check back regularly.
Source: Microsoft Press Release
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I always was of the opinion that you should never, and I mean NEVER underestimate he power of Microsoft’s Executive team. Balmer is a very smart man and the right person to head Microsoft. He knows how to negotiate his way out of the most difficult situation. Moving Lee to this undisclosed division was a very good move, and today we see just one of its fruits. God knows what other surprise they have in store for us. I am 100% certain that before Win8 releases, there will be another bombshell announcement. Grab a drink and some snacks because in this performance, the fat lady has not sang yet.
Not only that. Think like this. Google got just punched by Microsoft in the face. Google could have easily acquired B&N+Nook and wiped a part of Google Books scandal. They also could have gotten a lot of content legally to offer through Google Play. They could have pumped $ into B&N to continue fight with Microsoft. If MMI wasn’t acquired by Google, they would have already surrendered to Microsoft. This is a win for consumer, because it would pave an avenue for 3rd ecosystem apart from legacy iPhone and its clone Android, also they have avenue for buying content from iTunes, Amazon and “NewCo”. Of course B&N is already there, but without second chance it would have been tougher for them to survive beyond 2 to 3 years and on top of it, if they continued fighting with Microsoft, they could have easily lost and depleated bank balance and gone in the route of Borders.
And this is major loss to Google on a different end too, Google would have used B&N stores to showcase and support their hardware like Apple stores. Now Microsoft could use B&N to showcase their partners’ hardware in addition to B&N’s, a great source to expedite their Brick & Mortar stores number.