Microsoft to Take Stake in Nook Unit of Barnes & Noble

     In recent news, Microsoft has made a $300 million investment into Barnes and Noble; specifically the Nook division. This occurred on Monday and Microsoft will be given a 17.6 percent stake for their contribution to the Nook. In the market of e-books, the Nook is "hotly contested" by both the Amazon Kindle and the Apple products; Apple products taking the lead. So why the sudden interest in the Nook by Microsoft? This can be explained by Microsoft's future plans with Barnes and Noble and the tablet industry as a whole.
     Microsoft's investment will be used to not only fund the development of Nooks, but to differentiate the product in its style and capabilities. The new add-ons (which include a new design, a glowing screen, more apps and Windows 8 compatibility) will help increase the demand for the Nook by reaching to Windows users who have not entered the tablet phenomina as well as attract current tablet users. Thier partnership also allows Microsoft to gain profits from an untapped industry that Apple has set its sights on with its products. Another effect this colaboration has had is the rise in the price of Barnes and Noble stocks. This partnership is proving sufficiently more profitable for both parties in the near future. While it is not clear that this partnership will lead to Barnes and Nobles topping the industry over Apple and Amazon or even creating somewhat of a monopolistic power over the industry as Apple has now, it is evident that the consumer and producer surpluses of the Nook market will benefit and hurt the other two.

Source: http://dealbook.nytimes.com/2012/04/30/microsoft-to-take-stake-in-barnes-nobles-nook-unit/?ref=business