Microsoft Invests in the Nook

Last week, Microsoft invested $605 million in Barnes & Noble’s digital reader business, which produces both the Nook e-reader and the Nook digital tablet. As a result of the investment, Barnes & Noble will create a new subsidiary, Newco, in which Microsoft will hold a 17.6 percent stake. But honestly, I don’t really care about the numbers, and you probably don’t either.

For over a decade Microsoft has been like the older brother to the prodigal son of Apple, who resurged in 2001 with their iPod and has since dominated the tech market and become one of the biggest companies in the world. Microsoft has tried to crawl back in the game, but has only played catch-up to Apple, with devices such as the Zune player. Microsoft even heavily invested in their own tablet for 10 years before discontinuing their efforts in 2010, right before Apple announced the iPad.

Now with another investment in a third-tier competitor, it would seem that Microsoft will only continue its history of poor investments. However, I think this could be a move in the right direction for the company. With the move, Microsoft will be able to push their new operating systems and gain access to the digital content of Barnes & Noble and their Nook. This will at least give them a foothold in the rapidly growing e-reader and tablet market. Whether it will allow them to compete against giants like Amazon with their Kindle or Apple with their iPad is another question.

But this deal isn’t just a new version of the eternal PC vs. Mac question. No, what I think is most important about this deal is that in a sort of round-about way, with Microsoft’s investment history they’re like a technological litmus test, once they enter the market, you know that industry has evolved. In this case, it further signals the strength of the e-reader, and by extension, only amplifies the demise of the printed, paper text that everyone is talking about, at least everyone in the journalism world.

What I think the move might do though, is get more than just journalists discussing e-readers and digital tablets. Now that Microsoft is entering the arena, every large tech company is represented, which means that digital readers could get even more air time.

So let’s start with some of that air time now. What will reading look like in a decade? Will everything from newspapers to magazines to books be digital, even more so than now? The answer has to be yes. Digital readers are already popular, and their market share is only growing. As with all technology, it gets cheaper the longer it’s around. So in another 10 years, or even five years, digital readers will be so cheap that they’ll be as common as laptops. The other thing is accessibility. On a Nook, Kindle, or iPad, you can get almost any book you want as long as you have a Wi-Fi connection. In addition, with Internet access comes great connectivity, so when you’re reading a new book on your digital reader of choice, you’ll be able to click through to see a Wikipedia entry for more information on topic mentioned in the text.

Ironically, two of the companies that are leading the way in digital reading, Barnes & Noble and Amazon, were once at the head of the pack in traditional paper reading. But they know that to succeed and stay around, their business model will have to evolve, and they’ve done just that. The traditional paper business model has been inefficient ever since it began, and it has only hung around because it hasn’t had any competition, until now. With Microsoft adding fuel to the fire, it’s as clear as a high-definition screen that digital readers are here to stay.

 

Joel Marshall is a third-year literary journalism major. He can be reached at jbmarsha@uci.edu.