What have you always wondered about the economy? Tell Us

An unlikely partnership to build the e-textbook business

Marketplace Contributor Apr 30, 2012

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.

Marketplace is on a mission.

We believe Main Street matters as much as Wall Street, economic news is made relevant and real through human stories, and a touch of humor helps enliven topics you might typically find…well, dull.

Through the signature style that only Marketplace can deliver, we’re on a mission to raise the economic intelligence of the country—but we don’t do it alone. We count on listeners and readers like you to keep this public service free and accessible to all. Will you become a partner in our mission today?

Your donation is critical to the future of public service journalism. Support our work today – for as little as $5 – and help us keep making people smarter.