Microsoft, Barnes & Noble: It’s All About the Online Store
Microsoft’s $300 million deal with Barnes & Noble (NYSE: BKS), announced today, ain’t about the Nook. Instead, it is about the Nook Book Store. Indeed, Microsoft (NASDAQ: MSFT) finally has an online store that truly impresses The VAR Guy. And the Microsoft-Barnes & Noble deal sets up a potential showdown vs. Amazon Kindle eBooks vs. Apple iBooks and the iBookstore. So why should channel partners care about the eBook market?
A simple answer: Microsoft’s strategy in the eBook market could spill over into the SaaS applications market. Simply put, Microsoft needs more back-end online stores that stir demand for Windows 8 apps and tablets running Microsoft’s software.
Sure, Microsoft has some of its own online storefronts. One example is the Office 365 marketplace. Another is Windows Azure, which serves up a range of third-party cloud applications. But neither Azure nor the Office 365 marketplace has taken over the world since its launch.
The Microsoft-Barnes & Noble deal suggests that Microsoft is willing to buy or partner its way into online stores and back-end cloud services that can drive sales of endpoint devices (particularly tablets and smart phones).
Microsoft and Barnes & Noble say their strategy partnership will create a new Barnes & Noble subsidiary focused on the way people consume, create, share and enjoy digital content. Microsoft will have a 17.6 percent stake in the new company; Barnes & Noble will have an 82.4 percent stake. The new company’s name has not be announced.
Predictably, we can all expect a NOOK application for Windows 8. Some skeptics say Microsoft and Barnes & Noble are two drowning partners clinging onto each other. The Daily Ticker calls the deal “The Desperate Meets the Hopeless.”
But imagine if Microsoft made multiple online store investments, plugging Windows 8 tablets into a range of cloud services that you might otherwise overlook. The VAR Guy suspects Microsoft is preparing to open its wallet event wider…