New Partner for Barnes & Noble in Nook Business

Consumer Electronics

Published: December 28, 2012 9:35 am

Last Updated: April 28, 2020 2:38 am

U.K.-based media giant Pearson PLC (NYSE: PSO) has made a “strategic investment” of $89.5 million in cash in Nook Media LLC, a joint venture between Barnes & Noble Inc. (NYSE: BKS) and Microsoft Corp. (NASDAQ: MSFT). Pearson, which owns the Financial Times newspaper, will take a 5% equity stake in the joint venture, which now has a valuation of $1.789 billion, according to the B&N announcement.

Microsoft paid $300 million for a 17.6% stake in the company back in October, with B&N retaining the rest of the stock. After Pearson’s investment, B&N will own about 78.2% of Nook Media, and Microsoft will own 16.8%.

The odd thing about this, and about the whole Nook Media business, is that e-reader demand is falling like a rock. IHS iSuppli noted earlier this month that demand for e-readers will total just 14.9 million units this year, compared with tablet demand of 120 million units, from vendors like Apple Inc. (NASDAQ: AAPL), Google Inc. (NASDAQ: GOOG), Amazon.com Inc. (NASDAQ: AMZN) and Samsung Electronics, among a host of others, including Microsoft.

Demand for e-readers like the Nook is expected to fall to 7.1 million units by 2016, compared with demand for 340 million tablets in the same year. What does Pearson — or Microsoft for that matter — have to gain from selling a device fewer and fewer people want? For B&N, the Nook Media business may be the only thing standing between the company and bankruptcy, so it is easy to see why B&N is wildly optimistic.

Investors like the deal too, driving B&N’s shares up 5.5% in early trading to $15.15, in a 52-week range of $9.35 to $26.00.

Paul Ausick

The Average American Has No Idea How Much Money You Can Make Today ^(Sponsor)

The last few years made people forget how much banks and CD’s can pay. Meanwhile, interest rates have spiked and many can afford to pay you much more, but most are keeping yields low and hoping you won’t notice.

But there is good news. To win qualified customers, some accounts are paying almost 10x the national average! That’s an incredible way to keep your money safe and earn more at the same time. Our top pick for high yield savings accounts includes other benefits as well. You can earn up to 3.80% with a Checking & Savings Account today Sign up and get up to $300 with direct deposit. No account fees. FDIC Insured.

Click here to see how much more you could be earning on your savings today. It takes just a few minutes to open an account to make your money work for you.

Our top pick for high yield savings accounts includes other benefits as well. You can earn up to 4.00% with a Checking & Savings Account from Sofi. Sign up and get up to $300 with direct deposit. No account fees. FDIC Insured.

¹https://www.fdic.gov/national-rates-and-rate-caps