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Why The Nook Is Now Doomed

Discussion in 'Off-Topic Discussion' started by CatfishRivers, Apr 30, 2012.

  1. CatfishRivers

    CatfishRivers Well-Known Member

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    Why the Nook is now doomed - The Cody Word - MarketWatch (click for full article)

    "So how about that big investment in Barnes & Noble by Microsoft which valued the B&N Nook tablet/e-reader business at $1.7 billion? For the record, when Microsoft invested in Facebook at a $15 billion, I told my viewers on my TV show that it was a brilliant investment. This is not a brilliant investment by Microsoft. It's just a lose/lose.


    The Nook, which is currently having some modicum of success and showing nice growth but is far from profitable, is based on the Android operating system. Google's Android operating system. I predict that over the course of the next two years that we'll see Microsoft MSFT -0.02% convince the Nook guys to try a hybrid Android/Windows operating system or that they'll convince the Nook guys to ditch Android entirely for Microsoft's Windows 8 for tablets.


    The upshot is that you can expect Barnes & Noble BKS -0.87% and the Nook to face the same future that Nokia NOK has suffered since they bet on Microsoft - slow death. Ooh, maybe someday Microsoft will just take over and combine these two businesses and call it ... wait for it ... Nookia! It's stock symbol could just be "NO". "
     
  2. CatfishRivers

    CatfishRivers Well-Known Member

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    Microsoft buys Nook stake, Barnes & Noble shares soar - Yahoo!7 (click for full article)

    "NEW YORK/SEATTLE (Reuters) - Microsoft Corp is jumping into the fast-growing e-books market by investing $605 million over five years in Barnes & Noble Inc's Nook e-reader and college business, as it looks to unlock Amazon.com and Apple Inc's grip on the exploding tablet computer market.


    The move comes just six months before the world's largest software maker is due to launch its new touch-enabled Windows 8 operating system, and the inclusion of a Nook app on Windows tablets should allow them to compete with Apple's iPad and Amazon's Kindle Fire.


    It also gives Microsoft a direct interest in electronic publishing just as the market for downloadable college textbooks starts to take off and the publishing industry undergoes a radical shift toward electronic distribution.


    "It's a good strategic deal," said Sid Parakh, an analyst at fund firm McAdams Wright Ragen. "It gets Microsoft in the game for e-readers, and gives them access to a market that has been growing nicely and they've basically sat out of. It also makes Windows 8 a more compelling platform from an e-readers perspective."


    In turn, Barnes & Noble gets a much-needed capital injection and a way to enter the digital books market outside the United States. The new unit will be run and majority owned by Barnes & Noble and will maintain a relationship with the U.S. bookstore chain's nearly 700 stores.


    Shares of Barnes & Noble soared as much as 90 percent in early trading, before sliding back and ending with a 52 percent gain at $20.75. Microsoft shares, which recently hit a four-year high, edged up 0.1 percent to close at $32.015.


    Microsoft's initial investment of $300 million, which will give it a 17.6 percent stake in the newly created Barnes & Noble subsidiary, values the new unit at $1.7 billion. Over the next five years, Microsoft has committed to invest another $305 million. "
     

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