55 Publishing

Barnes & Noble (BN) and Microsoft (MS) have announced that BN is buy MS’ share of Nook Media LLC for approximately $125 million.  Although MS is loosing about $175 million on this 2-year investment, it will no longer have to pump $7 million per month into Nook to keep it going.

Obviously the eReader and the related digital media content are not money makers for BN.

Once MS is out of the picture BN will be able to spin-off this losing segment into a separate business. If this spin-off follows typical spin-offs, this new business will be saddled with so much debt that its long-term prospects for survival are dismal to say the least.

This news raises a number of questions that only time can answer.

Will anyone buy a Nook during this holiday shopping season? Would you if you thought the company was going out of business?

Likewise, will anyone buy eBooks as gifts?

Will anyone continue to purchase eBooks from BN, or will the exodus begin, especially since Amazon currently has some good deals on certain Kindle models?

What will happen to eBooks that have already been purchased by current Nook owners? Will they still be available on BN’s website? Can they be moved to a new eReader such as Amazon’s or Kobo’s?

Along with Sony’s earlier decision to leave the North American eReader market, it looks like Amazon has finally won the eReader wars.