Microsoft and Barnes & Noble have terminated their agreement resulting into cancellation of their Nook Media deal thereby making way for the latter to split into two separate business units.
Microsoft cited evolution of business strategies as the primary reason behind this decision while also adding that the decision was a mutual one. Barnes & Noble announced today that it will buy out Microsoft’s 16.8 per cent stake in Nook Media LLC for $125 million in cash and stock.
Microsoft, as a part of its investment deal with Barnes & Noble in 2012, agreed to pour in the $605 million which included a $300 million equity stake plus additional investments through to 2017. Barnes & Noble, in return, committed to developing e-reading apps for Windows PCs, phones and tablets.
Under a March 2014 revision of the agreement, the duo decided that Nook Media will discontinue distributing Nook Windows app and will stop working on Windows Phone app. Further, it was also agreed to that a replacement app for the Nook Windows app will be released, which didn’t materialize.
Beyond the Nook Media deal termination, Barnes & Noble has also detailed the terms of the “restructuring of the NOOK Media agreements”, which will pave way for “potential separation of” its “Retail and NOOK Media businesses.”
The termination of Nook Media deal came to light just a day after B&N announced revenue figures for its its Nook digital content, devices and accessories which stood at $64 million for its second FY 2015 quarter – down by 41.3 per cent year-over-year.
