Quote:
Originally Posted by wizwor
MSFT (phone, pc, tablet, xbox)+B&N+Netflix > Amazon or iTunes. This is how Microsoft becomes relevent in the tablet/content delivery space.
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Zune failed. Early MS tablet PC's failed. Windows Media Center bombed. Windows mobile OS's are repeated failures. Nokia is still flailing after ditching Symbian for Windows Mobile. Xbox is a success -- after years of losses. MS isn't likely to rely on an unaffiliated partner to deliver its content.
This is a lifeline for B&N, and may well buy them enough time to make the Nook profitable. However, it will also mean that B&N is going to expend a lot of time, and a big slice of that $300m investment, migrating the platform to Win8 and integrating any MS services or offerings that are part of the deal.
It could be good, but it could be a disaster. MS has deep pockets and tech experience; B&N has the consumer sales side, and were sharp enough to wring $600m out of MS. But MS has failed repeatedly with its content plays and can't brand its way out of a paper bag, and B&N has flubbed repeatedly with technology and their brand will suffer if they have to close more stores. They could complement each other, or trip each other up.
The Nook apparently cost B&N $200 million so far. MS is apparently investing $300 million now, and another $300 over the next 5 years, and Win8 is already aiming for tablets. Microsoft could have easily invested $600m over 5 years to put together their own international ebook store, albeit with a longer delay and without a brand.
This is not just about MS "getting into content." It's about blocking Google and other competitors from getting a piece of the Nook business when it goes on the auction block.
Hopefully, this will work out well for B&N. We'll find out in a year or two.