Microsoft has gotten next to nothing from its $300 million investment in Barnes & Noble, analysts said, but it may reap some rewards as it prepares to ship smaller tablets.
In April 2012, Microsoft and the bookseller announced a new, co-owned subsidiary that included Barnes & Noble's Nook business. That bought Microsoft a 17.6% stake in the company. Other parts of the deal settled patent disputes between the two, promised Nook royalties to Microsoft and yielded a Nook app for Microsoft's "Modern" tiled user interface.
A year later, Microsoft has "gotten nothing up to now," said Carolina Milanesi, a Gartner analyst.
But observers say the deal could still pay off in the form of a new generation of smaller, less expensive Windows tablets that would be better suited to e-reading than current larger models are.
A 7-in. or 8-in. tablet "is a great form factor" for e-reading, Milanesi said. Other analysts agreed that the Nook Media collaboration could pay dividends if Microsoft or one of its partners introduces such a device.
"This was more an investment in an organization," said IDC analyst Bob O'Donnell. "How that continues to play out we'll just have to see."
This version of this story was originally published in Computerworld's print edition. It was adapted from an article that appeared earlier on Computerworld.com.
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