Microsoft, Barnes & Noble launch e-reading joint venture

IDG News Service - Microsoft and Barnes & Noble have finalized the creation of a joint venture that will deliver e-reading applications, and the new company will be called Nook Media LLC, the book seller said on Thursday.

Previously called NewCo, the joint venture was initially announced in April when Microsoft said it would invest $300 million in the formation of the new company with Barnes & Noble. The company will deliver digital reading products to users of Microsoft products, including the Windows Phone and upcoming Windows 8 and RT operating systems.

One of the first products could be a Windows application that will serve e-books to users of Windows 8 and RT, according to an amended filing with the U.S. Securities and Exchange Commission on Wednesday. The application will be a digital bookstore and appear as a tile on the new touch-based user interface in Microsoft's upcoming OSes.

"We expect to launch a Nook reading app for Windows. We have not announced developing any devices based on Windows 8," said Mary Ellen Keating, a B&N spokeswoman, in an e-mail.

B&N already offers a range of Nook e-readers and Android tablets. B&N in late September announced two new tablets, including the Nook HD tablet with a 7-inch screen, which starts at $199, and the Nook HD+ with a 9-inch screen and a starting price of $269.

B&N also offers the Nook application that works with Apple's iPad, iPhones and Android smartphones and tablets.

IDC is projecting worldwide tablet shipments in 2012 to be 117.1 million units, rising to 142.8 million units next year. Tablets based on the Windows OS are expected to have a 1% share this year, while the market will continue to be dominated by Apple.

IDC is projecting e-reader shipments to be 23.6 million this year, down from the 27.7 million units in 2011. The one-dimensional e-reader shipments are being hurt by tablets priced under $200, which provide more functionality, according to IDC. Google offers the Nexus 7 and Amazon recently announced the Kindle Fire HD, both of which start at $199.

Microsoft holds a 17.6% stake in Nook Media LLC, while Barnes & Noble owns the rest. Right now Nook Media LLC is a subsidiary of Barnes and Noble, and the company couldn't say whether there would be a separation of the joint venture.

Agam Shah covers PCs, tablets, servers, chips and semiconductors for IDG News Service. Follow Agam on Twitter at @agamsh. Agam's e-mail address is agam_shah@idg.com