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Comment by Someone1234 | Hacker News Reader

I never understood and still don't understand this partnership.

So B&N has retail stores and Nook. Nook pre-Microsoft was Android based. They already had a Nook app coming out for Windows 8/RT. So when Microsoft invested a ton of money what was the ROI? Were they hoping to ship Nook devices with Windows RT on it? Or was there some other end-game?

300m is a lot of money and I don't understand what the pay off was even meant to be here.

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That's because this was never about Microsoft investing in the Nook.

Microsoft's investment was really just a settlement with Barnes and Noble in everything other than name.

Microsoft sued B&N (http://www.bbc.co.uk/news/business-12814018) for infringing on the patents it's been collecting royalties from Android manufacturers for. B&N then counter-sued (http://www.phonearena.com/news/Barnes---Noble-countersues-Mi...).

Once Microsoft invested in the Nook business, the whole thing got dropped. Makes you wonder if Microsoft were concerned that B&N actually putting up a fight might bring the whole of their lucrative Android licensing business in jeopardy.

Also, Microsoft worries about Google, Android, Amazon cutting into their business. Like most large corporations, some investments are defensive. If Nook had gone better, it might have given MS a toehold in that camp.

Yeah, I always saw it as a strategic "me too" product investment in response to Amazon Kindle.

This is my understanding as well. Most of the people Microsoft has sued for android patents have had some other part of the business that would go sideways if Microsoft withheld something (usually Windows) from them. B&N had no such weakness and so could see a patent suit all the way to the supreme court if it wanted, and since the Nook wasn't doing great anyway, the only 'downside' for B&N was that the Nook subbusiness went out of business.

So very uneven on the risk/reward equation for Microsoft. They finesse it by "investing" and getting another "licensee" for their patents.

Nook was a company built by investments by B&N, Pearson and Microsoft. It was terribly executed but the idea was to help Microsoft complete their digital media catalog that was lacking books and help Pearson and B&N get into digital bookselling.

Unfortunately almost none of those happened!

My rationalization of the investment is that B&N's partnership with publishers is/was tremendously valuable and would be very difficult/time consuming to build. It made more sense to partner with NOOK in order to secure access to that content than to try and build at Microsoft.

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