Nearly a year after Microsoft agreed to invest $300 million in Barnes & Noble’s Nook business unit, the bookseller is seriously considering what to do with the electronic book reader.

A report out from The New York Times, citing a person familiar with Barnes & Noble’s strategy, indicates that the company is possibly moving away from its hardware strategy to focus more on licensing content.

“They are not completely getting out of the hardware business, but they are going to lean a lot more on the comprehensive digital catalog of content,” the source told the Times.  The report also indicates that Barnes & Noble plans to forge closer relationships with partners like Microsoft and Samsung.

UPDATE: A spokesperson for Barnes & Noble offered this statement: “To be clear, we have no plans to discontinue our award-winning line of Nook products.”

At the time of the investment by Microsoft, many speculated that the software giant’s 17.6 percent stake in the Nook subsidiary would be used to showcase the Windows 8 operating system.

Despite positive reviews, the Nook has struggled to catch on with customers, especially in the face of competition from’s Kindle and Apple’s iPad. Earlier this month, Barnes & Noble reported that sales of the Nook device were falling below expectations. Reports also circulated that Barnes & Noble planned to shut down as many as 200 stores in the next 10 years, and word emerged earlier today that the company’s founder, Leonard Riggio, was working on an effort to purchase all of the assets of the retail business of the bookseller.

“Mr. Riggio plans to make the proposal in order to facilitate the company’s evaluation of its previously announced review of strategic options for the separation of its investment in NOOK Media LLC,” an SEC filing said.

According to estimates from mobile app analytics service Localytics, Barnes and Noble’s Nook has 10 percent share of the U.S. Android-based tablet market, followed by Google’s Nexus 7 at seven percent. Amazon’s Kindle Fire is on top.

Barnes & Noble will report its earnings on Thursday, at which time more details will be disclosed about the future of the Nook.

Previously on GeekWireBezos on eBooks: Amazon is ‘now seeing the transition we’ve been expecting’

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  • Guest

    I like this strategy. Much like Windows has conquered the desktop market through a licensing model, so too could the Nook platform win the limited-function tablet market. Android by itself is fairly useless to all but the most fiendish of hackers, but a compelling content-based model could help many OEMs monetise their customers with an attractive entry price point and a compesive ecosystem.

    • This Giant is Dying

      Get real. The article basically says that Nook is dying and MS’s $300M investment is likely to end up being worth nothing. Just another in a series of failed MS bets, which help explain why the stock is effectively flat over the last five years while the info tech group as a whole is +40% and Google =80%. And hey, apparently HP didn’t share your opinion of Android’s uselessness, since they chose it over Windows for their new tablet. Odd, huh? Especially with HP being MS’s biggest partner and all.

      • VHMP01

        HP’s Envy X2 and ElitePAD 900 run W8 and are new! More like HP’s Palms cheapest crapware made it to Android!

  • Guest

    MS doesn’t seem to have gotten any value out of this deal. They gave up a lawsuit they were likely to win, which would have been embaraasing for Google given their behind the scenes assistance to B&N. And a Windows-based Nook hasnt been firthcomh and now looks like it never will be. Fail.

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