This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Microsoft Said to Pursue $1 Billion Deal for B&N's Nook

Stocks in this article: BKS MSFT AOL GOOG

NEW YORK ( TheStreet) - We knew something was going on with Barnes & Noble's (BKS) Nook tablets.

Earlier this week, Nook devices failed to make a showing in the latest list of tablet sales leaders and that Nook tablets were being heavily discounted during the week leading up to Mother's Day. Now, we may be learning a lot more about what's going on behind the scenes.

According to an internal document that was reportedly obtained by AOL's (AOL - Get Report) TechCrunch, Microsoft (MSFT - Get Report) wants to buy B&N's Nook e-book division outright and may be willing to pay $1 billion for it.

In mid-afternoon trading, Barnes & Noble was gaining 23% to $21.85 while Microsoft was falling 0.6% to $32.78.

Last year, Barnes & Noble spun-off their tablet division into a new joint venture called Nook Media LLC with a $300 million investment from Microsoft. That new company was handling Nook tablets as well as B&N's college bookstore business.

If the secret document is correct, Microsoft's plan is to sell-off the college retail chain and keep Nook's digital division - but not Nook tablets. According to the report, Barnes & Noble will dump all of their Nook Android tablets by the end of next year.

The report says that while their tablets will be discontinued after the 2014 fiscal year, Nook content will continue on through "third-party applications. B&N and Microsoft are already working toward that trend under the existing joint venture.

More than 10 million Nook devices (e-readers and tablets) have bee sold so far as well as 7 million active content subscribers. In fiscal year 2012, Barnes & Noble reported that their Nook business was responsible for nearly $1.22 billion in revenues which translated into a loss of $262 million (EBITDA). They've estimated that revenues will fall in fiscal 2013 as well.

For Microsoft the sale should mean an almost instant infusion of content for their struggling Windows 8 platform and their line of Surface tablets as well as one less Google (GOOG) Android-based tablet line to worry about.

We've reached out for corporate comment on the report. Barnes & Noble spokesperson Mary Ellen Keating said "The Company has no comment on the Tech Crunch report" and had nothing further to add. The response from Microsoft PR firm's Rapid Response team spokeswoman simply said "Unfortunately, Microsoft does not comment on rumors or speculation".

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,164.95 -251.90 -1.45%
S&P 500 1,994.99 -26.26 -1.30%
NASDAQ 4,635.24 -48.1670 -1.03%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs