Barnes & Nobles and Microsoft have terminated their partnership that was signed in 2012. Microsoft had invested $300 million into Nook Media which has lost more than half its value in just two years.
The e-book reader is buying back Redmond’s 17.6 percent stake for $62 million and about 2.7 million B&N shares—a loss from the original $300 million investment. All ties between the companies in Nook Media, including contractual obligations, commercial agreements and international content acquisition, will be revoked. Microsoft will lose money on its initial investment, but will also be spared any future payments to fund Nook, which were running at about $21 million per quarter.
“Such termination will allow the Company to continue its rationalization of the Nook Digital business and enhances Barnes & Noble’s operational and strategic flexibility,”
said Barnes & Noble in a statement.
Nook revenues including devices, accessories and digital content sales were down a whopping 41.3 percent for the quarter, to $64 million. Barnes & Noble launched the Nook in an effort to compete in a market dominated by Amazon’s Kindle. Barnes & Noble announced in June that it would spin out its Nook division into a separate public company. The separation is now expected to be completed by the end of August 2015. “As the respective business strategies of each company evolved, we mutually agreed that it made sense to terminate the agreement,”said a Microsoft spokesman.
Earlier in August, Barnes & Noble and Samsung teamed up to launch 7 inch Galaxy Tab 4 Nook tablet featuring Nook Shop app offering access to books, TV shows, movies, magazines and apps.
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