Tuesday, May 1, 2012

Will Microsoft Sell Products In Barnes & Noble Stores?

There are obvious gains for Microsoft to partner with B&N.  It gets a footprint in the e-book space, it offers an app store to compete with Apple, and it eventually puts its new operating system into new devices.  But it also gets access to retail space, in bookstores and especially in college bookstores.  But will Microsoft take advantage of the brick and mortar side of this partnership or are all efforts directed strictly to the digital business?

Just as Apple has gained great traction with its stores, Microsoft now has a retail partners to offer a similar relationship.  Areas can be built up within these locations to sell all sorts of Microsoft products, including its new Nokia phones and XBox systems.  And B&N stores need diversification as physical book sales are declining.  A Microsoft presence gives another push to enter a store.

Shareholders like to look strictly at value that is perceived by spinning off and combining assets. Whether the Nook business is spun off or not for unlocking value may be a financial goal; but, for the overall health of the  business, the synergies of the store and digital presence are key to their mutual survival.

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