It pays to be a bully

http://www.zdnet.com/blog/microsoft/microsoft-and-barnes-noble-settle-patent-dispute-create-new-subsidiary/12575?tag=mantle_skin;content

Good luck to Microsoft with windows 8.

Holy crap! BKS up 90% in pre-market.

 http://finance.yahoo.com/q?s=BKS&ql=0

Wow! I didn't realize BKS market cap was a "mere" $791M post-Friday close. This deal values the new subsidiary alone at $1.7B.

I think you mean it pays to negotiate with a bully holding large sums of money.

Hmmm, wonder if MS will do a cut down version of W8 on ARM to target people who just want to focus on reading (ie Kindle market as opposed to iPad market). 

The first thing it most likely means is that every Windows 8 machine will be pre-loaded with the Nook App or at least highlighted within the Windows App Store.

Whether or not a Nook device running Windows 8 is produced remains to be seen. Since Microsoft will own 17% of the venture, Microsoft will have *some* say. In this case, these 17% voting rights care a lot more weight than 17%.

@cbae: It's 17.6 %

So I guess this explains why Andy Lees was "demoted" from Windows Phone.

Bully?  You make it sound like Microsoft twisted B&N's arm to spin off their business and accept $300 million dollars.  Please...things have been real cozy between the two for several months now...probably since December when Andy Lees was moved into a undisclosed role at Microsoft.  In the end, great strategic move by both parties.

Microsoft hands B&N $300 million dollars for no reason, or Microsoft forced B&N into a Nokia-like deal? I assume MSFT intends to make $$$ from licensing something, that's why they didn't need a huge stake in this company. So probably some kind of Windows running on newer Nooks.

@cbae:

Investors seem to like this deal a lot better than the Nokia one. Probably because it is a better deal for B&N, and it also settled a lawsuit that Nokia really didn't have.

@Bass: Microsoft will make 17%, excuse me, 17.6% of whatever the venture sells + licensing fees from the Android versions of Nook. The licensing fee part was the settlement, the rest of it is icing to Microsoft, but Barnes definitely made out in this deal. They wanted to spin off the Nook business anyway, and they weren't sure what kind of valuation they'd get. This deal means that the spinoff alone is worth twice what their Friday's market cap was.

4 hours ago, Bass wrote

So probably some kind of Windows running on newer Nooks.

That's not a bad idea. The current Nook tablets are underwhelming. The hardware's not bad, but the software isn't nearly as slick as the Kindle Fire.