Microsoft decided that it had no need for a partnership with Barnes & Noble for the bookstore chain’s Nook ereader and ended the deal on Thursday.
Back in 2012, Microsoft signed a pact to invest $605 million into the Nook device, its e-book business and the B&N college bookstores. According to The Wall Street Journal, the investment had included a $300 million equity stake through 2017. But B&N said today that it will buy out Microsoft’s 16.8 percent stake in Nook Media LLC for $125 million.
Part of B&N’s deal with Microsoft included providing the software giant with ereader apps for Windows phones, tablets and computers.
“As the respective business strategies of each company evolved, we mutually agreed that it made sense to terminate the agreement,” Microsoft told the WSJ in a statement.
While the deal may make it easier for B&N to eventually split into two companies, the largest bookstore chain in the country’s stork plunged this morning. Forbes reports that its shares dropped 10 percent following Microsoft’s decision. In addition, the retailer’s second quarter fiscal 2015 earnings were below what analysts expected.
B&N is expected to split its retail stores from BarnesandNoble.com by the end of August 2015, instead of March 2015.
Microsoft’s decision comes as the Nook segment’s revenue plunged 41 percent in the last quarter. Recently, B&N did strike a deal with Samsung, which is believed to be part of B&N’s plan to cut its investment in the nook so it can focus on the retail and college bookstores.
image of Carlos Santana at a Barnes & Noble courtesy of INFphoto.com