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Microsoft invests $300 million in Nook spinoff

We’re going to try to make sense out of this one for you: Microsoft made a huge play by investing $300 million in a B&N Nook spinoff for about 17% share of the company. Nook is an Android-powered ebook reader that is more expensive than the market leading Amazon Fire, has less than 30% share and runs on a platform that competes with Microsoft’s upcoming Windows 8. This deal, brokered by the same guy that ran Windows Mobile into the ground and was largely responsible for Sidekick/Kin fiasco, gets Microsoft an ebook reader application and a library for Windows 8 when it ships. And as we mentioned previously, the ongoing antitrust lawsuit against Apple and select group of publishers will nearly guarantee that the best prices will be available in the Kindle app from Amazon which is available for every platform out there.

So what’s the deal?

According to Mary Jo Foley, Nook will now have to pay royalties for the Android that ships on their devices.

It will also give Microsoft a way to play the ebook marketplace though the ROI on a $300 million dollar investment in ebooks seems questionable.

Microsoft has entered in series of high priced acquisitions and partnerships with Skype, Nokia and now Nook in what appears to be a play on consumerization though their most successful play is still the Hotmail acquisition nearly 15 years ago.

It would be interesting to see how these technology acquisitions and partnerships play in the Microsoft ecosystem which has business solutions competing for the same client business. So far, we can’t figure out the strategy but it points to surrounding Microsoft’s Windows 8 launch surrounded by brands and names that are popular with consumers. Whether it means the consumers buy Windows 8 as a result of it remains to be seen.

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