Barnes & Noble and Microsoft settled their patent litigation dispute, partnering to build a new corner of Barnes & Noble’s business. Microsoft will invest $300 million into a new, unnamed subsidiary that will contain the bookseller’s digital and college businesses.

Microsoft will have an estimated 17.6 percent equity stake in the new company that will develop Barnes & Noble’s work on Nook eReaders and tablets. The new partnership will begin with a Nook application for Windows 8. The new subsidiary will also focus on ways that educational publishers can use Nook Study software to distribute digital materials.

Microsoft president Andy Lees had this statement: “The shift to digital is putting the world’s libraries and newsstands in the palm of every person’s hand, and is the beginning of a journey that will impact how people read, interact with, and enjoy new forms of content … Our complementary assets will accelerate e-reading innovation across a broad range of Windows devices, enabling people to not just read stories, but to be part of them. We’re on the cusp of a revolution in reading.”

Read more