Microsoft Mulls Acquisition of Nook Media

Almost exactly a year ago, Microsoft Corp. (NASDAQ: MSFT) agreed to pay $300 for a 17.6% stake in a joint venture with Barnes & Noble Inc. (NYSE: BKS) that was intended to build on the digital reading technologies that had been developed by both companies. Based on Microsoft's investment, the new company, called Nook Media LLC, had an initial valuation of $1.7 billion.

A report at TechCrunch now says that Microsoft is considering buying out B&N and other investors for $1 billion. Nook Media includes a college bookstore division and e-books and Nook e-readers and tablets. The report is based on internal documents obtained by TechCrunch.

Nook Media plans to discontinue its use of Android from Google Inc. (NASDAQ: GOOG) by the end of 2014 and transition to a Windows environment for the Nook products. The documents obtained by TechCrunch also indicate that Nook Media would introduce third-party tablets sometime in 2014.

Shares of B&N are getting a real boost from the report, up more than 27% in premarket trading this morning at $22.61, a new 52-week high if it holds. The current range is $11.17 to $19.58. B&N shares topped $26 last year when the Microsoft investment was announced.

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