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Microsoft invests in Nook

Microsoft today announced at $300 million investment in Barnes & Noble's Nook reader. The two companies will create a subsidiary that will focus on the lucrative e-textbook market.

Kai Ryssdal: If you had, by chance, been wondering where Microsoft was in the increasingly relevant e-reader market -- wonder no more. Today the software company said it's gonna spend $300 million on hardware: Barnes & Noble's Nook reader. There's going to be a joint venture focusing on e-books, and in particular, the very lucrative college textbook business.

Marketplace's Nancy Marshall-Genzer reports.


Nancy Marshall-Genzer: Listen to what a CNET executive editor, David Carnoy,  has to say about the potential profit from digital textbooks.

David Carnoy: It’s in the billions of dollars so, I think it’s a huge market.

Yep, he said billion with a B. Textbooks could be a nice, profitable niche for Barnes & Noble. But the digital textbook world is a bit of a wild west. It’s wide open market with lots of competitors.

Bob O'Donnell:  It is kind of messy.

Bob O’Donnell is an e-reader analyst at IDC. He says the e-text book race is on, and Apple has a head start. It already offers interactive textbooks on the iPad. O’Donnell says  e-text book sellers are feeling their way is this crowed market.

O'Donnell: Because people are still trying to figure out the best options, and they’re trying to figure out additional material they include to try and make money.

Some digital textbooks have cool add-ons like tutoring programs and homework reminders that almost make me wish I were back in school.

Kathy Mickey is a digital textbook analyst at Simba.

Kathy Mickey: They facilitate a student’s management of homework. It tends to be automatically folded in for particular courses so that kids know what’s up.

Mickey says, e-text books haven’t overtaken print text books, by any means. But, over the next decade, the lure of digital will be hard to resist, and e-textbook sales will explode. After all, what student can resist the prospect of a much lighter backpack?

I’m Nancy Marshall-Genzer for Marketplace.

About the author

Nancy Marshall-Genzer is a senior reporter for Marketplace based in Washington, D.C. covering daily news.
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