| To: Sr K who wrote (1660) | 4/30/2012 9:23:13 AM | | From: Lahcim Leinad | | | | Is Microsoft rescuing B & N now as it did Nokia in 2011? I think so. If that example does truly apply, didn't take long for a bit of traction to appear, in terms of Microsoft pushing the Nokia Lumia rock up the proverbial hill a tad... |
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| From: Glenn Petersen | 4/30/2012 5:28:00 PM | | | | | | Barnes & Noble’s Nook Unit Is Worth More Than Its Parent Company
By MICHAEL J. DE LA MERCED
DealBook
New York Times
April 30, 2012, 3:38 pm
Of all the details that stand out from Microsoft’s deal for an 18 percent stake in Barnes & Noble’s e-reader unit, perhaps the biggest one is this: the Nook division is now worth $1.7 billion.
That is nearly double what Barnes & Noble’s entire market capitalization was on Friday. Indeed, it’s worth more than what the parent company has been valued at any time since mid-2008.
What is behind Microsoft’s valuation of the unit is a bit of a mystery, since Barnes & Noble doesn’t break out the Nook’s financial results in its earnings statements. William J. Lynch Jr., the bookseller’s chief executive, told DealBook in a telephone interview on Monday that the company would begin reporting the new division — which also includes the higher education business — separately in the near future.
Andy Lees, a president at Microsoft, said that the software giant based its valuations on the assets that would be contained in the to-be-renamed unit. He added that he believed that the college business had “a lot of synergy” with the Nook operations.
The deal is even richer than it first appears. Microsoft is pouring $300 million in the division to gain a 17.6 percent stake. But it is also paying $60 million a year over three years as an advance on revenue-sharing arrangements, according to regulatory filings. The software company is also paying $25 million over the next five years to help the business acquire new content, which is likely to include the purchase of foreign rights for digital media.
“This is a great win for shareholders,” said Barry Rosenstein, the founder of Jana Partners, one of Barnes & Noble’s largest shareholders. “When we invested, the market was ascribing no value to the Nook business, which was absurd. Management today has taken decisive action for shareholders to address this issue and unlock substantial value.”
What was announced on Monday was the product of months of talks between Barnes & Noble and potential partners that began before the start of the year, Mr. Lynch said.
“We kind of came to each other at the same time,” he said. “This deal is very much, ‘Hey, this is a great deal for Microsoft, and a great deal for Barnes & Noble.’ ”
The bookseller had been fielding offers from a number of companies since it accepted an investment from Liberty Media last spring, according to a person briefed on the matter. It finally began holding serious negotiations with Microsoft about two months ago, this person added. Driving the two companies was a mutual rivalry with Amazon.com, whose Kindle devices and ecosystem towers over the electronic content landscape.
The discussions were held at the highest reaches of both companies, including Mr. Lynch and Mr. Lees, as well as Microsoft’s chief executive, Steven A. Ballmer.
“It was important for us that the teams were working together every day,” Mr. Lees said.
Mr. Lynch and Mr. Lees said that the discussions were wide ranging and extensive. One important note about Monday’s transaction is that it isn’t exclusive, and Barnes & Noble can still take on additional partners — like Google, for instance.
The intensity and expansiveness of the talks left little time for celebration by the time the deal was signed at the end of the weekend. Mr. Lynch said that he had slept perhaps four hours between the signing of the transaction and the announcement of the investment.
“I have a lot less hair than I did 100 days ago,” he joked.
Barnes & Noble was counseled by the law firm Cravath, Swaine & Moore, while Microsoft was advised by Simpson Thacher & Bartlett.
Azam Ahmed contributed reporting.
dealbook.nytimes.com |
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| From: Rock_nj | 5/7/2012 2:02:02 PM | | | | | | Why Microsoft Invested In Barnes & Noble
Microsoft (Symbol: MSFT) announced on April 30, 2012 a surprise investment of $605 million in the well known book seller Barnes & Noble (Symbol: BKS). Why did Microsoft invest in Barnes & Noble, which is associated with the ailing bricks and mortar business model that has already caused long established companies, such as Borders and Blockbuster, to file for bankruptcy and liquidate themselves out of existence? There’s more to this story than meets the eye.
http://rocknj.hubpages.com/hub/Why-Microsoft-Invested-In-Barnes-Noble |
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| From: Glenn Petersen | 10/4/2012 2:20:36 PM | | | | | | Nook Media Officially Spins Out Of B&N With Microsoft’s Help, Plans To Enter Ten New Markets By Next Year
John Biggs
TechCrunch
October 4, 2012
Barnes & Noble has been aiming to create a subsidiary out of their Nook business since last April and now the ink is dry on a new partnership between Nook Media, a subsidiary of B&N, and Microsoft. Microsoft invested $300 million along with $305 million in payments to own 17% of the new company which has a $1.7 billion post money valuation.
Nook Media consists of the Nook Digital brand of software, content, and devices as well as B&N’s college business. The partnership is aimed at getting Nook content onto Windows 8 devices, thereby allowing Nook Media a valuable foothold in the burgeoning educational market and giving Microsoft the opportunity to retake a portion of the ereader market from incumbent Amazon.
“Few companies own more screens than Microsoft does and we’re really excited to bring our bookstore to Microsoft users across a variety of services that the company has,” said Jamie Iannone, President of Digital Product for Nook Media.
Nook Media, in effect, removes the Nook brand from B&N proper, although employees will still sell and promote the Nook product line in B&N’s stores.
“It’s hardware, software, content: everything Nook is part of Nook Media,” said Iannone. “There will always be a long term relationship between Barnes & Noble and the Nook business.”
The company plans to expand the Nook product internationally. They recently announced plans to sell the Nook devices in the UK and they plan to open 10 more markets next year, although there are no concrete plans to bring Nook hardware to those markets.
Indeed, the Nook business rose 38% in February while retail sales were flat year-over-year. By spinning off the most successful portions of the company, B&N puts itself into a place to turn around – or abandon – bricks and mortar stores altogether.
“Nook is an incredibly fast growing business,” said Iannone.
techcrunch.com |
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