An unlikely partnership to build the e-textbook business

A student reads a textbook in Blackwell bookshop in Oxford, England. Some of the most prestigious institutions in the country are taking efforts to create a new, permanent archive of scholarly work online.

David Brancaccio: When you think e-books, the iPad and the Kindle come to mind -- not Microsoft Windows. But Microsoft's been losing enough ground in tablets and e-readers that today it's decided to spend $300 million to invest in Barnes & Noble's Nook digital-book business.

Marketplace's New York bureau chief Heidi Moore joins us now. Hello, Heidi.

Heidi Moore: Hi David.

Brancaccio: Why Barnes & Noble? Why doesn't Microsoft just build the thing?

Moore: Microsoft has tried to build before and -- I will just ask you this: Do you own a Zune?

Brancaccio: I do not.

Moore: No, almost no one owns a Microsoft Zune; almost everyone owns an iPod. And what Microsoft learned from that sad little experiment is that the ecosystem of a product counts -- you can't just have the device to read things on or to listen to things, you need the ecosystem. Barnes & Noble has an ecosystem of books, so Microsoft doesn't have to make deals with publishers and incur all those headaches -- it can just ride the coattails of the Nook.

Brancaccio: Now what's this about textbooks? Is there any more money there than in regular old books?

Moore: Yeah, clearly you don't remember the vast expenditures of your college kids, but yes. I mainly just yell at them to get off my lawn... but when they're actually in school, what they're doing is buying books that are $100, $175 in some cases. And they're really expensive. It's a consistent revenue stream for a company like Microsoft.

Brancaccio: Nothing like a steady business. Marketplace's New York bureau chief Heidi Moore. Thank you very much for this.

Moore: Thank you David.

About the author

Heidi N. Moore is The Guardian's U.S. finance and economics editor. She was formerly the New York bureau chief and Wall Street correspondent for Marketplace.


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