According to TechCrunch, Microsoft is purportedly trying to purchase the Nook ebook catalog and digital ecosystem for $1 billion. TechCrunch obtained documents which state that Microsoft is actually trying to purchase Nook Media LLC, and the Nook e-readers and tablets.
The documents also suggest that Nook will soon be no more. More specifically Nook Media has plans to cancel their line of Android tablets like the Nook HD sometime by the end of the 2014 fiscal year, which really isn't that far off. Apparently, Nook Media is going to shift their focus to "third-party partner" devices. Although, it's not clear what third-party devices that will include but supposedly they're coming next year.
This really isn't too much of a surprise since Barnes and Noble recently announced that their revenue was down 26 percent during the holiday season when compared with last year's numbers. Sales of the Nook tablets are down period, with less than nominal numbers across the board.
According to TechCrunch, the documents list the current value of Barnes and Noble's assets at $1.66 billion. So even though Microsoft's offer is generous it's still much lower than the value of the company. In the grand scheme of things however, it makes sense that Microsoft would be interested in such an acquisition. Since Amazon, Apple and Google all have their respective digital storefronts Microsoft is likely considering the same.
At the end of the fiscal year in 2012 the Nook tablet apparently reeled in about $1.215 billion, which was a loss of $262 million in earnings before interest, taxes, depreciation and amortization (EBITDA). In addition, the company also predicts that revenue will drop to about $1.091 over the 2013 fiscal year, for a loss of $360 million. In other words, Nook Media and Barnes & Noble are taking quite a hit when it comes to their Android tablet line and proprietary media service.
Will Microsoft be able to turn that trend around though? Where would Microsoft be successful that Nook Media was not? Could we see an exclusive license for Microsoft devices instead of just Nook tablets? How do you feel about all this?
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