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Yesterday, Microsoft invested $300 million in a joint venture with Barnes & Noble that will spin off the book retailer’s Nook e-reader business. The deal values the unit at $1.7 billion, giving Microsoft a 17 per cent stake in the new business. For its investment, Microsoft is buying into a business that we estimate sold about 6 million e-readers and 2 million tablets last year.
As we discuss in a note yesterday, the only explanation we can find for Microsoft’s investment is that it is buying a share of the tablet market. While Nooks currently run on a forked Android operating system, it’s probably safe to say the next generation will use the nascent Windows 8 platform.
Photo: news reports, company releases, BI Intelligence estimates
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