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There is no question that Amazon is the leader in the eBook industry, but recent news about Microsoft’s strategic move with a $300 million investment into the Nook, B&N’s eBook reader has created some interesting buzz. On the surface it seems as if B&N is to gain, but when you look closely you can see a lot of possible implications of the deal.

blog post microsoft nook investment Microsoft, Barnes and Noble Marriage – A New Digital Birth for Tablets & eReaders?

Both the Mobile Marketer and Forbes discuss the new major move. In the Marketer, it sounds as though such a partnership is tenuous at best, with the thought that Microsoft just bought into yet another failing idea like the Zune or SPOT. Senior analyst of eMarketer, Paul Verna states that it helps to have the funding of a big company, but it doesn’t seem like the best move for Barnes and Noble.

The folks over at Forbes have a different discussion going on. Contributing writer, David Coursey has the opinion that Amazon’s Kindle could “be very dead,” as a result of Microsoft’s new partnership. Why? Initially Amazon may have the upper hand for the next couple of years. But as Coursey points out, Microsoft is about to pour $300 million into the Nook’s design and marketing strategy over the next five years.

Microsoft’s move could prove extremely beneficial in boosting their brand. Microsoft also owns Xbox which is another consumer electronics mainstay for gamers and the entertainment industry. Investing money in the Nook, which is already a well-known brand, allows them to take some of Amazon’s market share as well as gain a foothold into two markets: tablets and e-readers.

Here are some possibilities for what could happen:

  • Make Bing the Default Nook Search Engine: If Bing was the default search engine for the new Nook, and already is for other Microsoft products, it could provide Microsoft a better standing in household consumer usage.
  • Extend Content to Windows 8 Platform: Microsoft could take Barnes & Noble content and distribute it and sell it across Windows 8 devices. Maybe Microsoft just bought access to a large content library.
  • Engage the Student Market: Microsoft has the chance to delve into the world of student books and apps. While Amazon does boast of a pretty large network of users and readers in the eBook world, the new partnership has murmured thoughts on pushing the new Nook into the handle of college goers.
  • Tight Xbox Integration: The Nook could be a gateway to the Xbox universe and vice versa.
  • Microsoft Suite on Devices: If the Microsoft Office Suite comes to the Nook it could funnel in new customers into the Office product line. It could also allow students and Office workers to work on their Microsoft documents thereby making their Nook device their tablet of choice.
  • Advertising: Microsoft Advertising could power the Nook. This would allow Microsoft with some interesting advertising opportunities. Think of how contextual ads can be when you have such a wide purchase and browsing history available (which you would if people are purchasing and browsing content through their Nook). I’d still love to see ad-subsidized books and contextual ads based on what you’re reading. More thoughts in this post: Amazon Patent Suggests Mobile Ads for Kindle

It’s great to see more competition in the eBook space. Dominance by any single player tends to lead to stagnation. As with any new partnership, it remains to be seen what good Microsoft can do with the Nook. Microsoft stands to gain a good amount from this partnership: possible advertising in the Nook, a stronger platform, and increased market share for Bing. What does B&N gain? A large cash influx and some muscle to compete with Amazon.

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