Nook is a worthy competitor to Amazon’s Kindle in the fast-growing e-book market. It has about a 30 percent share compared to Amazon’s 65 percent. Prior to the deal, there was widespread worry that financially weak and acquisition-target B-N would be unable to bankroll further growth for Nook. That perception goes away due to Nook’s potential access to Microsoft’s deep pockets. Nook is here to say. [Full-disclosure: I own a Kindle, not a Nook.]
The new company retains ties to B&N’s nearly 700-member store chain. The introduction of Nook enlivened its outlook. The stores are important marketing tools for Nook. For instance, B&N’s Fifth Avenue flagship store in Manhattan has devoted more and more vital main floor selling space to Nook and its expanding line of accessories. That’s created more buzz.
B&N’s stores may not have the design sizzle of Apple’s stores, but they serve the same purpose. Customers get a hand-held introduction to Nook by a highly trained sales force. It’s a vital marketing advantage that B&N has over Amazon.
For Microsoft, a non-player in the e-reader market, the B&N outlay is chump change in its battle with Amazon. The initial benefit is a Nook app for Windows 8 and access to college students.
The deal is a PR win for both B&N and Microsoft.
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